In 2007 Dreyer Corporation began construction work under a three-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, 2007 follow:

Required
1. How much cash did Dreyer collect during 2007?
2. What was the initial estimated total income before tax on thiscontract?

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