80.2K

Verified Solution

Link Copied!

On June $15,2021,$ Sanderson Construction entered into a long$-$term construction contract to bulld a baseball stadium In

Washington, D$.$C$.,$ for $$320$ 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$)$:

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.

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.

Suppose the estimated costs to complete at the end of $2022$ are $$120$ million Instead of $$80$ 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.

Compute the revenue and gross profit will Sanderson report in its $2021,2022,$ and $2023$ income statements related to this contra

assuming Sanderson recognizes revenue over time according to percentage of completion. $($Enter your answer in millions $($i$.$e$.,$ $$4$

should be entered as $$4).$ Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the

below to arrive at your final answer.$)$

Answer & Explanation Solved by verified expert

See Answer