Compute the amount of revenue and gross profit or loss

Assignment Help Accounting Basics

Reference no: EM131891395

Problem

On June 15, 2016, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $420 million. The expected completion date is April 1, 2018, just in time for the 2018 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

	2016	2017	2018
Costs incurred during the year	50	150	60
Estimated costs to complete as of December 31	200	120	-

Part 1

Compute the revenue and gross profit will Sanderson report in its 2016, 2017, and 2018 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.

Part 2

Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the completed contract method.

Part 3

Suppose the estimated costs to complete at the end of 2017 are $200 million instead of $120 million. Compute the amount of revenue and gross profit or loss to be recognized in 2017 using the percentage of completion method.

Reference no: EM131891395

Questions Cloud

The difference between cheating and being a cheater : Opportunity can either increase or decrease unethical behavior. Provide one example of each.

What is the total interest expense : June 18, 2014 a company borrows $20,000 from a bank with a one year term and an annual interest rate of 6%. What is the total interest expense for 2015?

Do you believe one skill is more important than the other : Some managers are born speakers while others do much better with the written word. Do you believe one skill is more important than the other for a manager?

What do you see the demand curve being for apple video : What do you see the demand curve being for Apple Video Ipads for the next 3-year period in the United States?

Compute the amount of revenue and gross profit or loss : Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the completed contract method.

How does digital aidd communication : Organizational communication has been drastically changed by the introduction of modern technologies just in the last 10 years.

What total amount of cash will siebens collect on may : On June 1, 2014, Siebens Enterprises loaned $20,000 to Tyler Company for one year at 8 percent. What total amount of cash will Siebens collect on May 31, 2015?

What is the toal setup plus holding cost for wheel-rite : What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?What is the toal setup plus holding cost for Wheel-Rite?

What is the amount of keiths moving expense deduction : Keith is not reimbursed for any of these expenses by his employer. What is the amount of Keith's moving expense deduction?

User Account

All Pages