On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington. D.C., for $340 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2824 $ 40 160 2825 $ 120 90 Required 3 2826 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2 Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 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 2025 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. Complete this question by entering your answers in the tabs below. $ 50 Required 1 Required 2 Suppose the estimated costs to complete at the end of 2025 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Use percentages as calculated and rounded in the
On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington. D.C., for $340 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2824 $ 40 160 2825 $ 120 90 Required 3 2826 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2 Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 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 2025 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. Complete this question by entering your answers in the tabs below. $ 50 Required 1 Required 2 Suppose the estimated costs to complete at the end of 2025 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Use percentages as calculated and rounded in the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington.
D.C., for $340 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and
estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):
Costs incurred during the year
Estimated costs to complete as of December 31
Required:
2024
1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this
contract, assuming Sanderson recognizes revenue over time according to percentage of completion.
2025
$ 40
160
2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 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 2025 are $160 million instead of $90 million. Compute the amount of
revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to
percentage of completion.
Complete this question by entering your answers in the tabs below.
Construction revenue
Construction expense
Gross profit (loss)
Required 1
Required 2 Required 3
Suppose the estimated costs to complete at the end of 2025 are $160 million instead of $90 million. Compute the amount of revenue
and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of
completion.
Choose numerator
2025
$ 120
98
Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Use percentages as calculated and rounded in the
table below to arrive at your final answer. Loss amounts should be indicated with a minus sign.
To date
Percentages of completion
+
2026
+
$ 50
2025
< Required 2
Choose denominator
Recognized in prior Years
Required 3 >
$
$
$
% complete to date
Recognized in 2025
0
0
0
0
Show less A
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