Exercise $6-20($Algo$)$ Long$-$term contract; revenue recognition over time vs$.$ upon project completion

$[$L$06-9]$

On June $15,2024,$ Sanderson Construction entered into a long$-$term construction contract to build a baseball stadium in Washington,

D$.$C$.,$ for $$410$ 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$)$:

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.

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.

Suppose the estimated costs to complete at the end of $2025$ are $$200$ million instead of $$50$ 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.

Required $1$

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.

Note: Enter your answer in millions $($i$.$e$.,$ $$4,000,000$ should be entered as $$4).$ Loss amounts should be indicated with a

minus sign. Leave no cells blank.