Sandhill 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 $1500000 each quarter. The total contract price is $18870000 and Sandhill estimates total costs of $18300000. Sandhill estimates that the building will take 3 years to complete, and commences construction on January 2, 2018.

At December 31, 2019, Sandhill Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17650000 due to unanticipated price increases. What is the total amount of Construction Expenses that Sandhill will recognize for the year ended December 31, 2019?

$9007500

$13237500

$8520000

$8662500