1. Monroe Construction Company uses the percentage-of-completion method of accounting. In 2018, Monroe began work on a contract it had received which provided for a contract price of $37,500,000. Other details follow:

   2018

   Costs incurred during the year $18,000,000

   Estimated costs to complete as of December 31 12,000,000

   Billings during the year 16,500,000

   Collections during the year 9,500,000

   What should be the gross profit recognized in 2018?

   		$4,500,000
   		$1,500,000
   		$19,500,000
   		$7,500,000