On March 1, 2010, Lancelot Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,200,000 and will take 3 years to complete. The contract price was $2,700,000. The following information pertains to the construction period:

	2010	2011	2012
Annual Costs	$800,000	$1,100,000	$700,000
Estimated costs to complete	1,400,000	1,100,000	0
Yearly Progress billings	700,000	1,000,000	1,000,000
Yearly Cash collected	880,000	1,100,000	720,000

Required: (Round percentages to exclude decimal points and round dollar amounts to exclude cents)

Assuming the percentage-of-completion revenue recognition method is used.

Compute the amount of revenue and gross profit to be recognized each year

Prepare all necessary journal entries for 2012.