Lopez Inc. began working in 2014 on contract #3814, which provided for a contract price of $4,800,000. Other details:

2014 2015

Costs incurred during the year $800,000 $2,450,000

Estimated costs to complete as of 12/31 $2,400,000 $0

Billings during the year $900,000 $3,600,000

Collections during the year $600,000 $3,900,000

Assume that Lopez uses the percentage-of-completion method of accountig. The portion of the total gross profit to be recognized as income in 2014 is

a. $300,000

b. $400,000

c. $1,200,000

d. $1,600,000

Assume that Lopez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2015 is

a. $600,000

b. $900,000

c. $1,550,000

d. $4,800,000

PLEASE SHOW ALL CALCULATIONS. THANK YOU.