On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020. lust in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 2018 2019 2020 $ 60 $130 $70 190 60 - Required: 1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019 and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion 2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2019 are $190 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Show less Percentages of completion Percentages of completion Choose numerator + Choose denominator = % complete to date 2018 2019 2020 + + = = 100.00% 2018 Recognized in prior years To date Recognized in 2018 Construction revenue Construction expense Gross profit (loss) - To date 2019 Recognized in prior years Recognized in 2019 Construction revenue Construction expense Gross profit (loss) 2020 Recognized in prior years To date Recognized in 2020 Construction revenue Construction expense Gross profit (loss) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Suppose the estimated costs to complete at the end of 2019 are $190 million instead of $60 mi revenue and gross profit or loss to be recognized in 2019 using the percentage of completion m millions. Use percentages as calculated and rounded in the table below to arrive at your final an Percentages of completion Choose numerator + Choose denominator = % complete to date 2019 + 2019 Recognized in prior Years Recognized in 2019 To date Construction revenue Construction expense Gross profit (loss)
