In 2013, Dreyer Corporation began construction work under a 3-year contract.
The contract price is $800,000. Dreyer uses the percentage-of-completion method. The financial statement presentations relating to this contract on December 31, 2013, follow:

Required:
1. How much cash did Dreyer collect during 2013?
2. What was the initial estimated total income before tax on this contract?

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Balance Sheet Accounts receivable $15,000 $ 50,000 (47,000) Less contract billings Cost of uncompleted contract in excess of billings Income Statement Gross profit (before tax) on the contract 3,000 $10,000