Arithmetic on signed 12-bit octal number stored in sign magnitude form What is 4365 − 3412 when these values represent signed 12-bit
octal numbers stored in sign-magnitude format? The result should be written in
octal. Show your work.

Octal to binary:

4365: 100 011 110 101
3412: 011 100 001 010

By recognising the role of the sign bit, we can
represent positive and negative 64-bit numbers in terms of the bit value times a
power of 2. The binary number x, where xi means the ith bit, represents the number:

(x11 * -2^11) + (x10 * 2^10) + (x9 * 2^9) + ... + (x1 * 2^1) + (x0 * 2^0)

I have used the formula given above to convert the value of octal 4365 in decimal:

(1 * -2^11) + (1 * 2^7) + 2^6 + 2^5 + 2^4 + 2^2 + 2^0 = -2048 + 245 = -1803

Similarly, the value of octal 3412 in decimal is 1802.
Having obtained the two values in decimal, I subtract (-1803 - 1802), obtaining the result -3605.
Binary representation of 3605 is 111 000 010 101.
Converting it back to octal gives 7025.

This answer is wrong. It should be octal 7777 or decimal -3777.
The concept is not clear to me. Where am I going wrong?
$100 011 110 101$ if is taken as SM in 12bit is $-245$ decimal and $011 100 001 010$  is $1802$ decimal, so we obtain $-245-1802=-2047$. $2047$ in binary is $11111111111$ with $11$ bits so for minus we add one more $1$ to left = $111111111111$. It is octal 7777.