Stoney Construction Co. enters a 3-year contract to build a new warehouse facility. Stoney follows...
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Accounting
Stoney Construction Co. enters a 3-year contract to build a new warehouse facility. Stoney follows Completed Contract Method under U.S. GAAP and adopts progress billing accounting for its construction project. Information for Years 1, 2, and 3 is shown below:
| Year 1 | Year 2 | Year 3 | |
| Sales price | $ 2,800,000 | $ 2,800,000 | $ 2,800,000 |
| Estimated costs | $ 1,600,000 | $ 2,000,000 | $ 2,000,000 |
| Costs incurred to date (paid in cash) | $ 400,000 | $ 900,000 | $ 2,000,000 |
| Billed to date | $ 250,000 | $ 1,150,000 | $ 2,800,000 |
| Received in cash to date | $ 190,000 | $ 950,000 | $ 2,800,000 |
1) What is the gross profit recognized in Year 3? (Show work/ individual calculations)
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