71. Hayes Construction Corporation contracted to construct a building for $3,000,000. Construction began in 2012 and was completed in 2013. Data relating to the contract are summarized below:

Year ended

December 31,

2012 2013

Costs incurred $1,200,000 $900,000

Estimated costs to complete 800,000

Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2012, and 2013, respectively, Hayes should report gross profit of

a. $540,000 and $360,000.

b. $1,800,000 and $1,200,000.

c. $600,000 and $300,000.

d. $0 and $900,000.