57.

Pharoah Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1750000 each quarter. The total contract price is $21000000 and Pharoah estimates total costs of $17950000. Pharoah estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, Pharoah Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18200000 due to unanticipated price increases. Pharoah Construction completes the remaining 25% of the building construction on December 31, 2023, as scheduled. At that time the total costs of construction are $18950000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Pharoah will recognize for the year ended December 31, 2023?

Revenue

Expenses

a. $5250000

$ 5300000

b. $21000000

$18950000

c. $4737500

$ 4737500

d. $5250000

$ 4737500

58.

Sheridan Construction Company had a contract starting April 2021, to construct a $23300000 building that is expected to be completed in September 2023, at an estimated cost of $21300000. At the end of 2021, the costs to date were $8307000 and the estimated total costs to complete had not changed. The progress billings during 2021 were $4100000 and the cash collected during 2021 was 3130000. Sheridan uses the percentage-of-completion method. For the year ended December 31, 2021, Sheridan would recognize gross profit on the building of:

a. $12993000.

b. $0.

c. $780000.

d. $713047.