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): Costs incurred during the year 2821 $ 60 Estimated costs to complete as of December 31 2022 2023 $120 $70 70 180 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 this question by entering your answers in the tabs below. Required 1 Required 2 Required 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. (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 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. (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 % complete to date 240 2021 2022 2023 $ $ 240 Percentages of completion Choose numerator Choose denominator Actual costs to date Estimated total costs 60 S 180 $ 220 $ 2021 To date Recognized in prior years 90 s 60 $ 30 $ 25.00% 75.00% 100.00% $ 220 Recognized in 2021 S $ 90 Construction revenue Construction expense Gross profit (loss) 0 $ 60 30 $ 0 $ To date Recognized in 2022 Construction revenue Construction experte Gross profit (s) 180 2022 Recognized in prior years 27015 18075 90s $ $ 5 90 $ 50 $ 305 120 60 To date Recognized in 2023 Construction revenue Construction expense Gross profit (los) 5 $ 5 2023 Recognized in prior years 360 s 220 s 140 $ 270 s 180 S 90 $ 8 8 8 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 2021, 2022, and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. LOSS famounts should be indicated with a minus sign.) Year $ 2021 2022 2023 Revenue recognized 0 million o million 360 million Gross Profit (Loss) recognized $ o million $ million $ 140 million $ Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 41 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 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.) Percentages of completion Choose numerator Choose denominator Actual costs to date Estimated total costs $ 1801 $ 320 % complete to date 2022 56.25% To date $ Construction revenue Construction expense Gross profit loss) 2022 Recognized in prior Years 2027 s 90 $ 180 s 60 $ 22 $ 30 $ Recognized in 2022 112 120 (8) $ $
