On January 1, Year 1 Nico's Builders Inc. enters into a contract with a client to renovate a warehouse for a price of $4,000,000. The construction is estimated to take five years at a total estimated cost of $3,000,000. Costs incurred during Year 1 total $500,000 and Year 2 total $600,000. Determine the revenue and expense amounts to be recognized in the income statement during Year 2 assuming that the client retains control of the warehouse during construction and estimates remain accurate as of the end of Year 2.

A. What is the total revenue recognized in Year 2?

B. What is the total expense recognized in Year 2?