This assignment is graded on the following:

Schedules are completed in totality for each year, with a profit$/$loss amount calculated for each year $(6$ points$).$

Appropriate use of Excel $-$ Use of cell references for amounts if given in the problem data and use of formulas for all calculations $(4$ points$).$

Company Background Information:

On July $1,2025,$ Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. On July $1,$

Torvill estimated that it would take between $2$ and $3$ years to complete the building. On December $31,2027,$ the building

was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete

the contract, and accumulated billings to Gumbel for $2025,2026,$ and $2027.$

Instructions

a$.$ Using the percentage$-$of$-$completion method, prepare a schedule to compute the profit or loss to be

recognized as a result of this contract for the years ended December $31,2025,2026,$ and $2027.($Ignore

income taxes.$)$

b$.$ Using the cost recovery method, prepare a schedule to compute the profit or loss to be recognized as a result

of this contract for the years ended December $31,2025,2026,$ and $2027.($Ignore income taxes.$)$