Exercise $18-33($Algorithmic$)($LO$.5)$

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 $$3,781,500.$ Jebali finished construction in $2023$ at a cost of $$3,403,350.$ However, Samson insisted that Jebali redo the doorway; otherwise, the contract price would be reduced. The estimated cost of redoing the doorway is $$158,400.$ In $2024,$ the dispute is settled and Jebali fixed the doorway at a cost of $$126,720.$

a$.$ How much must Jebali include in gross income for these items? What amount of deductions is Jeball allowed for $2023?$

Jebali must include $ in gross income and is allowed deductions of $ for $2023$

b$.$ In $2024,$ how much must Jebali include in gross income? What expenses can Jebali deduct in that year?

In $2024,$ Jebali must include $ in gross income and may deduct $ as expense in that year.