Exercise 18-34 In 2017, Vaughn Construction Corp. began construction work under a 3-year contract. The contract price was $1,040,000. Vaughn uses the percentage-of-completion method or financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to e mated costs com ietn the contract. The financial statement presentations relating to this contract at December 31, 2017, are shown below. Balance Sheet Accounts receivable Construction in process Less: Billings Costs and recognized profit in excess of billings $16,500 $61,000 59,700 1,300 Income Statement Income (before tax) on the contract recognized in 2017 (a) How much cash was collected in 2017 on this contract? Portion of contract billings collected (b) What was the initial estimated total income before tax on this contract? $15,250 Income before tax on this contract