Gorman Construction Co. began operations in 2013. Construction activity for 2013 is shown below. Gorman uses the completed-contract method.

				Billings		Collections		Contract Costs		Estimated
		Contract		Through		Through		Incurred Through		Additional Costs
Contract		Price		12/31/13		12/31/13		12/31/13		to Complete
1		$3,200,000		$3,150,000		$2,600,000		$2,150,000		%u2014
2		3,600,000		1,500,000		1,000,000		820,000		$1,880,000
3		3,300,000		1,900,000		1,800,000		2,250,000		1,200,000

Which of the following should be shown on the income statement for 2013 related to Contract 1?

Gross profit, $1,000,000

Gross profit, $1,050,000

Gross profit, $600,000

Gross profit, $450,000