1. ABC Development Corp. (ABC) is a real estate developer of condominium properties. Currently the company is developing a 100-unit condominium property in Midtown Manhattan. The building is estimated to cost $100 million. The units are of equal sizes and similar features. The estimated cost of each condominium unit is $1,000,000 million and ABC plans to sale each unit for $1,500,000. As of June 30, 2017, $40 million has so far been spent on the project; 20 units were under contract for a sale price of $1,500,000 each and the buyers each paid a security deposit of $150,000 with the balances due upon completion of construction in May 2018. Assume this project meets the criteria for accounting under the Deposit method, present the journal entry that should be booked by ABC for the deposits received from the buyers.

2. Assume the same facts as in Question 1 except that instead the project meets the criteria for accounting under the Percentage of Completion method. For the period ended June 30, 2017, present the journal entries to recognize the Cost of sales.