King Construction Company began work on a contract in 2019. The contract price is $4,000,000, and King determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows:
................................................................................................2019
Costs incurred during the year .....................................$ 800,000
Estimated costs to complete, December 31 ...............2,400,000
Billings during the year ....................................................600,000
Collections during the year .............................................400,000

Required:
1. How much gross profit or loss does King recognize in 2019?
2. Next Level Prepare the appropriate sections of the 2019 income statement and ending balance sheet.