(Answered) In 2013 fargo corporation began construction work under a

Accounting

In 2013, Fargo Corporation began construction work under a three-year contract. The contract price is $3,600,000. Fargo uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2013, follow:

Balance Sheet

Accounts receivable-construction contract billings $150,000

Construction in progress $450,000

Less contract billings 360,000

Costs and recognized profit in excess of billings 90,000

Income Statement

Income (before tax) on the contract recognized in 2013 $90,000

What was the initial estimated total income before tax on this contract?

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