60.1K

Verified Solution

Link Copied!

Exercise 5-18 Long-term contract; revenue recognition over time vs. upon project completion [LO5-9 On June 15, 2018, Sanderson Construction entered into a long-term construction contract to estimated costs to complete at year-end for the life of the contract are as follows (S build a baseball sta million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and on, Costs incurred during the year Estimated costs to complete as of December 31 60 $138 $70 190 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. 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.) Exercise 5-18 Long-term contract; revenue recognition over time vs. upon project completion [LO5-9 On June 15, 2018, Sanderson Construction entered into a long-term construction contract to estimated costs to complete at year-end for the life of the contract are as follows (S build a baseball sta million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and on, Costs incurred during the year Estimated costs to complete as of December 31 60 $138 $70 190 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. 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.)

Answer & Explanation Solved by verified expert

See Answer