On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $310 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

	2021			2022			2023
Costs incurred during the year	$	70		$	60		$	30
Estimated costs to complete as of December 31		130			30

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 $120 million instead of $30 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.

3 On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $310 million. The expected completion date is April 1, 2023.just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions 5 points Costs incurred during the year Estimated costs to complete as of December 31 2021 2022 2023 $ 70 $60 $30 130 30 eBook # Hint Reference 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 $120 million instead of $30 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 Required Required 1 2 3 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.) Percentages of completion Choose numerator Choose denominator = % complete to date Actual costs to date Estimated total costs 2021 70 + 2001 - 35.00% 2022 $ 130 + 160 = 81.25% 2023 $ 160 100.00% 2021 To date Recognized in prior years Recognized in 2021 Construction revenue 110 S 0 $ 110 Construction expenses 70 S 0 $ 70 Gross profit (loss) $ 40 s 0 $ 40 + S 160 S 2022 To date Construction revenue Construction expenses Gross profit (loss) Recognized in prior years Recognized in 2022 $ 0 130 $ 130 $ 0 To date Construction revenue Construction expense Gross profit (loss) 2023 Recognized in prior years Recognized in 2023 $ $ $