Question: Please assist in answering the following problem.
Ramos, Inc. began work in 2008 on contract #3814, which provided for a contract price of $7,200,000. Other details follow:
2008 2009
Costs Incurred During the Year $1,200,000 $3,675,000
Estimated Costs To Complete, As of December 31 3,600,000 0
Billings During the Year $1,350,000 $5,400,000
Collections During the Year $900,000 $5,850,000
Assume that Ramos uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2009 is
Choose one answer.
a. $900,000
b. $1,350,000
c. $2,325,000
d. $7,200,000