In the year 2012, Utica Construction Company contracted to build a warehouse for $6,000,000. Data relating to the contract are as follows:
2012 2013
Costs incurred during the year $1,000,000 $3,000,000
Estimated costs to complete as of year end $3,000,000 -
Billings during the year $3,000,000 $3,000,000
Cash collections during the year $2,500,000 $3,500,000
Determine the gross profit that Utica Construction should recognize in both 2012 and 2013 using
i) the completed contract method