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On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C. for $360 million. The expected

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On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C. for $360 million. The expected completion date is April 1, 2023, Just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Conts incurred during the year Estimated costs to complete as of December 31 2022 2023 $ 60 $120 $70 180 70 Required: 1. Compute the revenue and gross profit will Sanderson report in its 2021 2022 and 2023 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 2021 2022 and 2023 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 2022 are $140 million instead of $70 million. Compute the amount of revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion + % complete to date 2021 2022 2023 240 Percentages of completion Choose numerator Choose denominator Actual costs to date Estimated total costs 60 + $ 180 + $ 250 $ 2021 $ $ 310 250 25.00% 58.06% 100.00% $ To date Recognized in prior years Recognized in 2021 $ 0 $ 0 Construction revenue Construction expense Gross profit (05) 0 $ $ 0 $ 0 $ 0 2022 Recognized in prior years To date Recognized in 2022 $ 0 Construction revenue Construction expense Gross profit (loss) 0 $ 0 2023 Recognized in prior years To date Recognized in 2023 $ 0 Construction revenue Construction expense Gross profit (los) $ 0 amounts should be indicated with a minus sign.) Year Revenue recognized million Gross Profit (Loss) recognized million 2021 2022 million million 2023 million million Required 1 Porcentagon of completion Choose numerator Choose denominator % complete to date 2022 il 0 2022 Recognized in prior Years To date Recognized in 2022 $ Construction revenuo Construction expense Gross profit (loss) $ 0 $ 0

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