Problem:
A company uses the percentage-of-completion method of accounting. In 2007, The company began work on a contract it had received which provided for a contract price of $15,000,000.
2007
Costs incurred during the year $7,200,000
Estimated costs to complete as of December 31 4,800,000
Billings during the year 6,600,000
Collections during the year 3,900,000
What should be the gross profit recognized in 2007?