Pharoah Construction Company began operations on January $1,2025.$ During the year, Pharoah Construction entered into a contract with Bloom Corp. to construct a manufacturing facility. At that time, Pharoah estimated that it would take $5$ years to complete the facility at a total cost of $$4,545,000.$ The total contract price for construction of the facility is $$5,973,000.$ During the year, Pharoah incurred $$1,190,420$ in construction costs related to the construction project. The estimated cost to complete the contract is $$4,220,580.$ Bloom Corp. was billed and paid $24\%$ of the contract price.

$($a$)$

Your Answer Correct Answer $($Used$)$

Prepare schedules to compute the amount of gross profit to be recognized for the year ended December $31,2025,$ and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and "recognized profit" at December $31,2025,$ under each of the following methods. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).$ If answer is $0,$ please enter $0.$ Do not leave any fields blank$\_)$

$($a$)$ Cost$-$recovery method.

Gross profit to be recognized

$

PHAROAH CONSTRUCTION COMPANY

Computation of Billings on Uncompleted Contract in Excess of Related Costs under Cost$-$Recovery Method

Construction Costs Incurred During the Year :

$ $$

Partial Billings on Contract $$

$($b$)$

Prepare schedules to compute the amount of gross profit to be recognized for the year ended December $31,2025,$ and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and recognized profit" at December $31,2025,$ under each of the following methods. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).$ If answer is $0,$ please enter $0.$ Do not leave any fields blank.$)$

$($b$)$ Percentage$-$of$-$completion method.

PHAROAH CONSTRUCTION COMPANY

Computation of Gross Profit to Be Recognized under Percentage$-$of$-$Completion Method

$

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