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Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2007 and was completed in 2008. Data relating...

Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2007 and was completed in 2008. Data relating to the contract are summarized below:
                                           Year Ended
                                             Dec. 31
                                      2007             2008
     Costs incurred                 $600,000         $450,000
     Estimated cost to complete     $400,000            -0-
Reese uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2007, and 2008, respectively, Reese should report gross profit of
A. $270,000 and $180,000.
B. $300,000 and $150,000.
C. $900,000 and $600,000.
D. $0 and $450,000.

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