Cullumber Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1000000 each quarter. The total contract price is $12000000 and Cullumber estimates total costs of $17200000. Cullumber estimates that the building will take 3 years to complete, and commences construction on January 2, 2018.

AtDecember 31, 2019, Cullumber Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17450000 due to unanticipated price increases. Cullumber Construction completes the remaining 25% of the building construction on December 31, 2020, as scheduled. At that time the total costs of construction are $18200000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Cullumber will recognize for the year ended December 31, 2020?

Revenue Expenses

a)$3000000 $5112500

b)$4550000 $4550000

c)$12000000 $18200000

d)$3000000 $4550000