On January 1, 2016, Lockhart Company contracted to construct a building for Hallstrom Corporation. The contract price was $2 million and the construction was expected to take three years to complete. Actual and expected costs for each year were Year 2016 - $750,000; Year 2017 - $540,000 and Year 2018 - $210,000.

How much GROSS PROFIT would Lockhart record in year 2018, assuming that they use the cost-to-cost method?

a. $500,000

b. $70,000

c. $180,000

d. There is not enough information to determine this.

e. $250,000