Jamison Construction Company won a contract to build a warehouse for Fresno Company. The contract price was $8,600,000. Jamison estimated that the warehouse would take three years and cost $7,200,000 to complete. Actual and expected costs for the next three years were: Year 1 - $3,240,000, Year 2 - $2,520,000 and year 3 - $1,440,000 Required: 1. Determine how much revenue and gross profit Jamison should recognize each year using the cost-to-cost method. 2. What is the major drawback of the cost-to-cost method? 3. How do we classify advance payments and billings in excess of cost when using the cost-to-cost method? 4. How do we classify costs incurred in excess of billings when using the cost-to-cost method?