the following information applies to the two questions below. On January1, 2018, Randall Pearson Corp.("RPC"), a major real estatedeveloper, entered into a contract to build a large retail center in downtown Philadelphia. The retail center was completed at the end of 2020(that is, the project took three years tocomplete). The contract price was$12,000,000. RPC's fiscalyear-end is December 31. The following is ayear-by-year summary of construction costs incurred and the estimated costs to complete the project at the end of eachyear, as well as additional information regarding billings and collections.

2018

2019

2020

Actual costs incurred during the year

$2,250,000

$6,750,000

$2,325,000

Actual costs incurred during prior years

$0

$2,250,000

$9,000,000

Estimated costs to complete(at end of theyear)

$6,750,000

$2,250,000

$0

Billings during the year

$2,100,000

$7,800,000

$2,100,000

Cash collections during the year

$1,500,000

$6,000,000

$4,500,000

1.What is the total gross profit on the project assuming the percentage of completion method(and cost-to-costapproach) is used for revenue recognitionpurposes? What is the total gross profit on the project assuming the completed contract method is used for revenue recognitionpurposes?

2.In the finalyear, the Company recognized revenue and gross profit(or loss) on thelong-term construction project. The journal entry to record revenue and gross profit(or loss) in the final year included which of the following(note: CIP= Construction inProgress):