On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $220 million. The expected completion date is April 1, 2020, just in time for the2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are asfollows ($ in millions):2018 2019 2020Costs incurred during the year $ 40 $80 $50Estimated costs to complete as of December 31 120 60 —Required:1. How much revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements relatedto this contract assuming Sanderson recognizes revenue over time according to percentage of completion?
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $220 million. The expected completion date is April 1, 2020, just in time for the
2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as
follows ($ in millions):
2018 2019 2020
Costs incurred during the year $ 40 $80 $50
Estimated costs to complete as of December 31 120 60 —
Required:
1. How much 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?
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