Contract	Contract Price	Biling Through 12/31/15	Collections Through 12/31/15	Estimated Cost to 12/31/15	Cost to Complete
1	4,800,000	4,725,000	3,900,000	3,225,000	----
2	3,600,000	1,500,000	1,000,000	820,000	1,800,000
3	3,300,000	1,900,000	1,800,000	2,250,000	1,200,000

Gorman Construction Co. began operations in 2015. Construction activity for 2015 is shown below. Gorman uses the completed-contract method.

12. Which of the following should be shown on the income statement for 2015 related to Contract 1?

a. Gross profit, $675,000

b. Gross profit, $1,500,000

c. Gross profit, $1,575,000

d. Gross profit, $900,000

13. Which of the following should be shown on the balance sheet at December 31, 2015 related to Contract 2?

a. Inventory, $680,000

b. Inventory, $820,000

c. Current liability, $680,000

d. Current liability, $1,500,000

14. Which of the following should be shown on the balance sheet at December 31, 2015 related to Contract 3?

a. Inventory, $200,000

b. Inventory, $350,000

c. Inventory, $2,100,000

d. Inventory, $2,250,000