Exercise $6-20($Algo$)$ Long$-$term contract; revenue recognition over time vs$.$ upon project completion $[$LO$6-9]$

On June $15,2024,$ Sanderson Construction entered into a long$-$term construction contract to build a baseball stadium in Washington, D$.$C$.,$ for $$430$ 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$)$:

$\backslash$table$[[,,,,],[,,2024,2025,2026],[$Costs incurred during the year,$$40,$$$170,$$$60,],[$Estimated costs to complete as of December $31,210,140,-,],[$Required:$,,,,]]$

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 $$210$ million instead of $$140$ 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.

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