In 2002, construction work began on a three-year contract at a price of $7,525,000. The firm uses the percentage-of-completion method of financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to the total estimated costs for completing the contract. The financial statement presentations relating to this contract on December 31, 2002, are

Question

In 2002, construction work began on a three-year contract at a price of $7,525,000.  The firm uses the percentage-of-completion method of financial accounting purposes.  The income to be recognized each year is based on the proportion of cost incurred to the total estimated costs for completing the contract.  The financial statement presentations relating to this contract on December 31, 2002, are

Balance Sheet
Accounts Receivable          $150,500
Construciton in progress $602,000
Less progress billings    562,000

Income Statement
Gross profit on construct. contracts $310,000

Determine the
a. Cash collected in 2002
b. Esitmated income on the construction contract