Gleason Construction enters into a long-term fixed price contract to build an office building for $27,000,000.In the first year of the contract Gleason incurs $5,000,000 of cost and the engineers determined that the remaining costs to complete the project are $24,000,000. How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the percentage-of-completion method?

1. $2,000,000 profit
2. $2,000,000 loss
3. $0
4. $344,828 loss