A Construction Company Uses the Percentage-Of-Completion Method of Accounting The Portion of the Total Contract Income to Be Recognized

A construction company uses the percentage-of-completion method of accounting. In 2007, the company began work on a government contract which had a contract price of $4,000,000 and estimated costs of $3,000,000. Additional data were as follows: $\begin{array}{|l|l|l|}\hline & \mathbf{2 0 0 7} & \mathbf{2 0 0 8} \\\hline \text { Costs incurred during the year } & \$ 600,000 & \$ 2,550,000 \\\hline \text { Estimated costs to complete, as of } 12 / 31 / 2007 & 2,400,000 & \\\hline \text { Billing during the year } & 720,000 & 3,080,000 \\\hline \text { Collections during the year } & 500,000 & 3,100,000 \\\hline\end{array}$ The portion of the total contract income to be recognized during 2007 is:

A) $120,000
B) $200,000
C) $250,000
D) $1,000,000

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