On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

	2018			2019			2020
Costs incurred during the year	$	60		$	130		$	70
Estimated costs to complete as of December 31		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.

4 On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 2018 $ 60 190 2019 2020 $130 $70 60 21/25 points awarded Scored 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.) % complete to date Percentages of completion Choose Choose numerator denominator Actual costs to Estimated total date costs Is 60 IS 250 = $ 190- S 250 2018 2019 2020 OO 24.00% 76.00% 100.00% To date 2018 Recognized in prior years 94$ Recognized in 2018 $ 0 $ 94 Construction revenue Construction expense Gross profit (loss) $ 60$ 0 $ 60 $ 34S 0 $ 34 To date 2019 Recognized in prior years 296 $ 93 Recognized in 2019 Is $ 203 Construction revenue Construction expense Gross profit (Loss) $ (190) 106 $ (60) $ 34 $ OOO (130) 72 $ To date 2020 Recognized in prior years 360 $ 296 Recognized in 2020 $ 64 Construction revenue Construction Is IS (260) $ (70) expense (190) $ 106 $ Gross profit (loss) $ 100 X $ (6) 4 On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2018 $ 60 190 2019 $130 60 2020 $70 Costs incurred during the year Estimated costs to complete as of December 31 21/25 points awarded Scored 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 this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.) Year $ 2018 2019 2020 Revenue recognized 0 million 0 million 360 X million Gross Profit (Loss) recognized $ 0 million $ 0 million $ 100 X million $ $ 4 On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2018 $ 60 190 Costs incurred during the year Estimated costs to complete as of December 31 2019 2020 $130 $70 60 21/25 points awarded Scored 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 Suppose the estima costs to complete at the end of 20 are $190 million stead of million. Compute amour revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. (Enter your answers in millions. Use percentages as calculated and rounded in the table below to arrive at your final answer.) % complete to date Percentages of completion Choose Choose numerator denominator Actual costs to Estimated total date costs $ 190 - $ 380 = 2019 50.00% 2019 Recognized in prior Years To date Recognized in 2019 $ 180 X $ 94 $ 86 Construction revenue Construction expense Gross profit (loss) $ (190) $ (60) $ (130) $ (10) X $ 34 (44)