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4. ELO Construction Co. began operations in 2015. Construction activity for 2015 is shown below. ELO uses the completed-contract method.

Contract	Contract Price	Billings Through 12/31/15	Collections Through 12/31/15	Costs to 12/31/15	Estimated Costs to Complete
1	$4,650,000	$4,450,000	$3,900,000	$3,700,000	-
2	3,600,000	1,800,000	1,600,000	870,000	$2,030,000
3	3,100,000	1,860,000	1,600,000	1,680,000	1,120,000

What amount of gross profit should be reported on the income statement for 2015?

$0

$1,340,000

$950,000

$1,480,000

5. Reedy Builders, Inc. is using the completed-contract method for a $12,400,000 contract that will take three years to complete. Data at December 31, 2015, the end of the first year, are as follows:

Costs incurred to date	$5,200,000
Estimated costs to complete	7,800,000
Billings to date	4,920,000
Collections to date	4,540,000

The gross profit or loss that should be recognized for 2015 is

a $600,000 loss.

$0.

a $240,000 loss.

a $200,000 loss.