In 2008, Long Construction began work under a three-year contract whose price is $800,000.
Long 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, 2008, follow:

Required:
1. How much cash was collected in 2008 on this contract?
2. What was the initial estimated total cost on this project?
3. What is the estimated total income (before tax) on this contract?

Balance Sheet Accounts receivable-construction contract billings Construction in progress Less: Contract billings Construction in progress less billings Income Statement Income (before tax) on the contract recognized in 2008 $15,000 50,000 (47,000) $ 3,000 $10,000