Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for Samson, Inc., under a long-term contract. The gross contract price was $5,756,000. Jebali finished construction in 2022 at a cost of $5,180,400. However, Samson insisted that Jebali redo the doorway; otherwise, the contract price would be reduced. The estimated cost of redoing the doorway is $177,250. In 2023, the dispute is settled and Jebali fixed the doorway at a cost of $141,800.

a. How much must Jebali include in gross income for these items? What amount of deductions is Jebali allowed for 2022?

Jebali must include __________? in gross income and is allowed deductions of __________ for 2022.

b. In 2023, how much must Jebali include in gross income? What expenses can Jebali deduct in that year?

In 2023, Jebali must include ____________ gross income and may deduct ___________ as expenses in that year.