Answer:
Gross profit recognized in 2020 = ($100,000)
Explanation:
Gross profit recognized = (Cost to date / Total estimated costs * Expected profit) - Previously recognized profit
Gross profit recognized in 2019 = $2,500,000 - ($1,500,000 + $1,200,000)
Gross profit recognized in 2019 = $2,500,000 - $2,700,000
Gross profit recognized in 2019 = $(200,000)
Gross profit recognized in 2020 = [$2,500,000 - ($1,500,000 + $1,300,000)] - $(-200,000)
Gross profit recognized in 2020 = $2,500,000 - $2,800,000 - (-$200,000)
Gross profit recognized in 2020 = $2,500,000 - $2,800,000 + $200,000
Gross profit recognized in 2020 = -$100,000