Question #5 ( 8 marks)

In 2016, Safa construction began construction work on a 3-year contract. The contract price was $750,000. Safa uses the percentage of completion method {PC}. PC = [Costs incurred to date]/[Total estimated costs]

The income statement for the project in 2016 is given below:

Construction revenue	$125,000
Construction expenses	100,000
Gross profit	$ 25,000

Calculate the initial estimated total cost, and the initial estimated total profit