Melanie Construction company entered into a contract to construct a building for Steve Elbert. The contract called for a flat fee of $900,000, and specified that a progress report be given periodically as to percentage of completion. Construction activities for the first two years are summarized below: 2007: Construction costs incurred during the year amounted to $172,800; estimated cost to complete, $547,200. 2008: Construction costs incurred during the year amounted to $385,450; estimated cost to complete, $166,750. Instructions: Using the percentage-of-completion method, compute the amount of gross profit Melanie Construction Company should recognize in 2007 and 2008 as a result of this contract. 2007: 2008: