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Manson Construction Corp. has consistently used the percentage-of-completion method. In 2020, Manson started work

on a $10,500,000 construction contract that was completed in 2021.

The following information was taken from Manson's 2020 accounting records:

Billings to date $3,300,000

Costs incurred 3,150,000

Collections to date 2,100,000

Estimated costs to complete 6,300,000

Under the earnings approach, what amount of gross profit should Manson recognize in 2020 on this contract?

a. $525,000

b. $350,000

c. $1,050,000

d. $700,000

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