Egay Construction Corporation contracted with the province of Pampanga to construct a bridge at a contract price of P16,000,000. Egay Corporation expects to earn P1,520,000 on the contract. The percentage of completion method is to be used and the completion stage is to be determined by estimates made by the engineer. The following schedule 'summarizes the activities of the contract for years x0-x2. Cost Estimate Cost to Engineer's Estimate of Year Incurred Complete Billings Completion x0 P4,600,000 P9,640,000 31% -x1 4,500,000 5,100,000 58% x2. 5,250,000 0- 100% Collection on Contract on Billings P5,000,000 P4,500,000 6,000,000 $5,000,000 5,400,000* 6,100,000 *A 10% retainer accounts for the difference between billings and collections. Under the percentage of completion method, using the engineer's estimate as the measure of completion to be applied to revenues and costs, how much is the gross profit earned each year? a. P545,600; b. P545,600; c. P1,760,000; d. P1,760,000; x1 P 498,400; P1,044,000; P6,400,000; P1,800,000; x2 P 606,000 P1,044,000 P1,650,000 P1,650,000