Sandhill Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company won a contract to build a road for the municipality of Cochrane West. It is estimated that the project will be completed over a three-year period starting in June 2023. Sandhill uses the percentage-of-completion method of recognizing revenue on its long-term construction contracts. For tax purposes, and in order to postpone the tax on such revenue for as long as possible, Sandhill uses the completed-contract method allowed by the CRA. For the second year of operations, Sandhill made progress on the construction of the road for the municipality. The account balances at December 31, 2024, for the construction project and the accounting and tax balances of accounts related to the equipment used for construction follow. (The balances at December 31, 2023, are also listed.) 2024 2023 Accounts Receivable $106,000 $324,900 Asset/Liability (net of billings to date of $820,200 and $402,400) 128,400 103,800 Revenue from Long-Term Contracts 442,400 506,200 Construction Expenses 411,800 351,500 Equipment Accumulated Depreciation-Equipment 1,101,100 1,101,100 463,300 171,300 Undepreciated Capital Cost 621,000 980,325 Sandhill's tax rate was 25% in 2023 and 2024. The enacted tax rate for 2025 and subsequent years was reduced to 20% on September 15, 2024. Income before income tax for the year ended December 31, 2023, was $198,300 and for December 31, 2024, was $128,400. Sandhill reports under IFRS.