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Bizhelp, CPA
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Experience:  BA degree and Certified Public Accountant
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E18-5 (Analysis of Percentage-of-completion Financial Statements) In 2010, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,000,000. Steinrotter 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, 2010, follow. Balance Sheet Accounts receivable-construction contract billings $18,000 Construction in progress $65,000 Less: Contract billings 61,500 Cost of uncompleted contract in excess of billings 3,500 Income Statement Income (before tax) on the contract recognized in 2010 $19,500 (a) How much cash was collected in 2010 on this contract? (b) What was the initial estimated total income before tax on this contract?
Submitted: 5 years ago.
Category: Single Problem
Expert:  Bizhelp replied 5 years ago.

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