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Now give this answer completely without skipping even a small step of calculation and try not to give answer in long paragraphs and answer the questions by following these instructions: ?Solution should be in proper format. ?A complete answer starts with the problem's objective OR addition of available data/ information Or the right approach. ?Add all necessary steps/supporting explanations until the answer is complete. ?If there are any formulae, you should mention it. ?Write calculations in a format so it can be easily pasted in chegg equation render tool. ?Do not use Python or any code-based for calculations (Important). ?Double check the solution to accomplish the correct concept, explanation, and calculations before submitting. ✅ The Final Answer should be a simple and clear summary of the solution in lucid language. ✅ The Final Answer Step is to include the crux of the entire solution. ✅ The final answer step contains the result of the solution only in a clear & concise manner. ✅ The Final Answer should be a simple and clear summary of the solution in lucid language. ✅ Final Answer Step is to include the crux of the entire solution. ✅Final answer step contains the result of the solution only in clear & concise manner.102025, anhoe Construction Corp. began constuction work under 5-year contract. The contract price was $2650.00 es theercantag of conltonmethodio nrc cumin pss To ome eosin Proportion of cost Incurred to total estimated costs for completing the contract. The financial statement be | Conc December 31.2025 cow. —— | em . ia A I — sw20m od | Comruction process s653000 4 205000 E 2 Costs and recognized prot in excess of bills «3000 FE E> E Ee b= Eo E ol Income (before tax) on the contract recognized In 2025 $163520 a 2) ge Wht vis the nial estimated ota Income before taxon this contract? Income before axon this contract $ 43400000 Textbook and Media 1 Soret Later Attempts: 2ot 4 sed [RI

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Now give this answer completely without skipping even a small step of calculation and try not to give answer in long paragraphs and answer the questions by following these instructions: ?Solution should be in proper format. ?A complete answer starts with the problem's objective OR addition of available data/ information Or the right approach. ?Add all necessary steps/supporting explanations until the answer is complete. ?If there are any formulae, you should mention it. ?Write calculations in a format so it can be easily pasted in chegg equation render tool. ?Do not use Python or any code-based for calculations (Important). ?Double check the solution to accomplish the correct concept, explanation, and calculations before submitting. ✅ The Final Answer should be a simple and clear summary of the solution in lucid language. ✅ The Final Answer Step is to include the crux of the entire solution. ✅ The final answer step contains the result of the solution only in a clear & concise manner. ✅ The Final Answer should be a simple and clear summary of the solution in lucid language. ✅ Final Answer Step is to include the crux of the entire solution. ✅Final answer step contains the result of the solution only in clear & concise manner.Uploaded ImageUploaded Image102025, anhoe Construction Corp. began constuction work under 5-year contract. The contract price was $2650.00 es theercantag of conltonmethodio nrc cumin pss To ome eosin Proportion of cost Incurred to total estimated costs for completing the contract. The financial statement be | Conc December 31.2025 cow. —— | em . ia A I — sw20m od | Comruction process s653000 4 205000 E 2 Costs and recognized prot in excess of bills «3000 FE E> E Ee b= Eo E ol Income (before tax) on the contract recognized In 2025 $163520 a 2) ge Wht vis the nial estimated ota Income before taxon this contract? Income before axon this contract $ 43400000 Textbook and Media 1 Soret Later Attempts: 2ot 4 sed [RI

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Asked by: PADMA
Created at: 2025-10-16 07:46:07

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# Objective To **find the initial estimated total income before tax** on the contract using the percentage-of-completion method, based on the given financial data. --- ## Available Data / Information - Contract price: **$2,650,000** - Construction in process (cost incurred to date): **$683,000** - Billings to date: **$245000** - **Income recognized (before tax) in 2025:** $163,920 - The percentage-of-completion method is used. --- ## Formulae Used ### 1. Percentage of Completion: \[ \text{Percentage of Completion} = \frac{\text{Cost Incurred to Date}}{\text{Total Estimated Cost}} \] ### 2. Revenue Recognized to Date: \[ \text{Revenue Recognized to Date} = \text{Contract Price} \times \text{Percentage of Completion} \] ### 3. Income Recognized to Date: \[ \text{Income Recognized to Date} = \text{Revenue Recognized to Date} - \text{Cost Incurred to Date} \] *We use the 2025 figures to work backwards and find the **total estimated cost**. Then, we find the total estimated income before tax.* --- ## Step 1: Setting up the Equation Let \( X \) = **Total Estimated Cost** ### Calculate Percentage of Completion: \[ \text{Percentage of Completion} = \frac{683,000}{X} \] ### Revenue Recognized to Date: \[ \text{Revenue Recognized to Date} = 2,650,000 \times \frac{683,000}{X} \] ### Income Recognized to Date: \[ \text{Income Recognized to Date} = [2,650,000 \times \frac{683,000}{X}] - 683,000 \] We know: \[ \text{Income Recognized to Date} = 163,920 \] --- ## Step 2: Form the Equation and Solve for \( X \) \[ [2,650,000 \times \frac{683,000}{X}] - 683,000 = 163,920 \] Add \( 683,000 \) to both sides: \[ 2,650,000 \times \frac{683,000}{X} = 163,920 + 683,000 \] \[ 2,650,000 \times \frac{683,000}{X} = 846,920 \] Divide both sides by 2,650,000: \[ \frac{683,000}{X} = \frac{846,920}{2,650,000} \] \[ \frac{683,000}{X} = .3192 \] Solve for \( X \): \[ X = \frac{683,000}{.3192} \] \[ X = 2,140,455.53 \] --- ## Step 3: Find the Initial Total Estimated Income Before Tax \[ \text{Estimated Income Before Tax} = \text{Contract Price} - \text{Estimated Total Cost} \] \[ = 2,650,000 - 2,140,455.53 \] \[ = 509,544.47 \] --- ## Final Answer **The initial estimated total income before tax on this contract is:** \[ \boxed{509,544.47} \] --- ### The Crux By using the percentage-of-completion method and working backwards from the income recognized in 2025, we determined the initial estimated total income before tax to be **$509,544.47**.

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