Construction Co. started a contract in June 2011 to build a small foot bridge at a fixed price of $ 10 million. The bridge was to be completed by October 2013 at a total estimated cost of $8 million. Total cumulative costs incurred by the end of December 2011 and 2012 were $2 million and $5.5 million, respectively. Because of cost overruns in 2012, it is now expected that the project will cost $800,000 more than originally estimated. Final costs at the end of the project totaled $9 million. Construction Co. follows the guidance in IFRS.
Required:
Determine the amount of gross profit to be recognized for the year ended December 31, 2012.