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*P17.10 (LO 5, 6, 7) (Long-Term Contract with Interim Loss) On March 1, 2025, Pechstein...

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*P17.10 (LO 5, 6, 7) (Long-Term Contract with Interim Loss) On March 1, 2025, Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,400,000. The building was completed by October 31, 2027. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2025, 2026, and 2027 are given below. Contract costs incurred during the year Estimated costs to complete the contract at 12/31 Billings to Fabrik during the year 2025 $2,880,000 3,520,000 3,200,000 2026 $2,230,000 2,190,000 3,500,000 2027 $2,190,000 -0- 1,700,000 Instructions a. Using the percentage-of-completion method, prepare schedules 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 schedules 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 incomes taxes.)

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