Ott Builders, Inc. has consistently used the percentage of- completion method of accounting for construction-type con tracts.

During year1 Cord started work on a $9,000,000

fi xed-price construction contract that was completed in year3.

Ott’s accounting records disclosed the following:

                       December31

        Year1                                 Year2

                                                                    Cumulative contract costs

     incurred                             $3,900,000                         $6,300,000

                                                                         Estimated total cost at

     completion                          7,800,000                          8,100,000

How much income would Ott have recognized on this

contract for the year ended December31, year2?

a. $100,000

b. $300,000

c. $600,000

d. $700,000