Supplier Corp. enters into a government contract during the year to provide computer equipment for $2,400,000. The contract consists of a single performance obligation to provide specified equipment in three years. Total costs estimated by Supplier Corp. for the contract are $1,680,000. The equipment is highly specialized and has no alternative uses. As negotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp. in the event of a contract cancellation. Actual costs incurred during the first year of the contract were $768,000 including unexpected cost overruns of $96,000 due to labor inefficiencies. Assume that at the end of the second year of the contract, the estimate of total costs has increased to $1,800,000 million due to an increase in cost of materials. Actual costs incurred to date are $1,350,000, excluding year one inefficiencies. a. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in the second year of the contract. 1 Recognized revenue 2 Gross profit $ 960,000 x $ 3 Adjusted contract margin $ 288,000 * 324,000 x b. Calculate (1) cumulative recognized revenue, (2) cumulative gross profit, and (3) cumulative adjusted contract margin at the end of the second year of the contract. 1 Cumulative recognized revenue $ 960,000 x 2 Cumulative gross profit $ 288,000 x 3 Cumulative adjusted contract margin $ 192,000 x