The Quality Construction Company was the low bidder on an office building construction contract. The contract bid was $7,000,000, with an estimated cost to complete the project of $6,000,000.The contract period was 34 months starting January 1, 2007. The company uses the cost-to-cost method of estimating earnings. Because of changes requested by the customer, the contract price was adjusted downward to $6,700,000 on January 1, 2008. A record of construction activities for the years 2007–2010 is as follows:

The estimated cost to complete the contract as of the end of each accounting period is:

2007 ……………       $3,500,000

2008 …………… 400,000

2009 ……………        0

Calculate the gross profit for the years 2007–2009 under the percentage-of-completion method of revenue recognition.

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Actual Cost Progress Cash Year Current Yea ilngs Receipts 2007. 2008 2009_. 2010.... $2,500,000 3.300,000 410,000 $2.100,000 $1800,000 3,100,000 3000.000 1,000.000 700.000 . 1.300,000 I