Solution-What was the initial estimated total income before

What was the initial estimated total income before tax

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Reference no: EM133126198

Question - In 2020, Swifty Construction Corp. began construction work under a 3-year contract. The contract price was $1,090,000. Swifty uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below.

Balance Sheet

Accounts receivable		$16,600
Construction in process	$62,600
Less: Billings	58,000
Costs and recognized profit in excess of billings		4,600

Income Statement

Income (before tax) on the contract recognized in 2020 $20,032

Required -

(a) How much cash was collected in 2020 on this contract?

(b) What was the initial estimated total income before tax on this contract?

Reference no: EM133126198

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What was the initial estimated total income before tax

Reference no: EM133126198

Reference no: EM133126198

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