Muscle Construction signs a contract to build a classroom addition for Smallvi

Muscle Construction signs a contract to build a classroom addition for Smallville High School. The total price for the
addition is $800000 and the initial cost estimate was $650000. The project is expected to take 18 months to complete. The project was begun in 2006 and
finished in 2007. Muscle Construction uses a calendar year for reporting purposes. The following details are from 2006 and 2007: For 2006: Cost incurred:
$350000 Billings: $400000 Collections: $390000 Estimated cost to complete: $350000. For 2007: Cost incurred: $280000 Billings: $400000 Collections:
$350000. Calculate the amount of gross profit Muscle Construction should recognize in 2007 using the percentage-of-completion method.