work Week 11 0 Saved Help Save & Exit Submit heck my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to question Exercise 6-20 (Algo) Long-term contract; revenue recognition over time vs. upon project completion [LO6-9 On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $260 million. The expected completion date is April 1, 2023.just in time for te 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 2021 2022 2023 $ 60 $80 $65 1 40 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 $110 million instead of $60 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. Answer is not complete. Complete this question by entering your answers in the tabs below. 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 - 2021 2022 2023 Percentages of completion Choose numerator Choose denominator Actual costs to date Estimated total costs 60,000,000 200,000,000 140,000,000 200,000,000 205,000,000 205,000,000 2021 Recognized in prior years 78,000,000 60,000,000 18,000,000 30.00% 70.00% 100.00% To date Construction revenue Construction expense Gross profit (loss) Recognized in 2021 78,000,000 60,000,000 18,000,000 Construction revenue Construction expense Gross profit (loss) 2022 To date Recognized in prior years 182,000,000 X 78,000,000 140,000,000 XS 60,000,000 42,000,000 $ 18,000,000 $ $ $ Recognized in 2022 104,000,000 80,000,000 24,000,000 Ek my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate ca Red 2023 205,000,000 100.00% $ 205,000,000 2021 Recognized in prior years $ Construction revenue Construction expense Gross profit (loss) To date 78,000,000 60,000,000 18,000,000 Recognized in 2021 78,000,000 60,000,000 18,000,000 2022 Construction revenue Construction expense Gross profit (loss) To date 182,000,000 140,000,000 42,000,000 $ $ $ Recognized in prior years 78,000,000 $ 60,000,000 $ 18,000,000 $ Recognized in 2022 104,000,000 80,000,000 24,000,000 Recognized in 2023 78,000,000 Construction revenue Construction expense Gross profit (loss) 2023 Recognized in prior years $ 182,000,000 $ 140,000,000 $ 42,000,000 To date 260,000,000 205,000,000 55,000,000 $ $ $ $ $ 13,000,000 ( Required 1 Required 2 > X Answer is not complete. 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 amounts should be indicated with a minus sign.) Year Gross Profit (Loss) recognized million 2021 2022 2023 Revenue recognized million million 260 million million million S 205 Required 1 Required 3 > Required 1 Required 2 Required 3 Suppose the estimated costs to complete at the end of 2022 are $110 million instead of $60 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.) % complete to date Percentages of completion Choose numerator Choose denominator Estimated costs to Actual costs to date complete $ 110,000,000 - 170,000,000 2022 64.71% S Construction revenue Construction expense Gross profit (loss) To date Recognized in prior Years 168,235,294 S 78,000,000 110,000,000 XS 60,000,000 X 58.235,294 x S 16,000,000 X Recognized in 2022 + 90,235,294 50,000,000 42,235,294 $ $ $ s $