1). Mars Corporation uses the percentage-of-completion method. At the end of the first year of a $9,000,000 contract, the following information is available:

Costs to date:	$2,000,000
Estimated costs to complete	6,000,000
Progress billings during the year	1,800,000
Cash collected during the year	1,500,000

In the first year, Mars should recognize gross profit of

a

$750,000

b

$250,000

c	$1,000,000

d

$300,000

2). Mars Corporation uses the completed-contract method. At the end of the first year of a $9,000,000 contract, the following information is available:

Costs to date:	$2,000,000
Estimated costs to complete	6,000,000
Progress billings during the year	1,800,000
Cash collected during the year	1,500,000

In the first year, Mars should recognize gross profit of

a	$1,000,000

b

$300,000

c

$0

d

$250,000