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Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below: Contract amount$3,090,000Cost:20171,220,0002018620,000Gross
Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below:
Contract amount$3,090,000Cost:20171,220,0002018620,000Gross profit:2017830,0002018420,000Contract billings:20171,545,00020181,545,000
ADH recognizes revenue upon completion of the contract.
What is the journal entry in 2018 to record revenue?
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- Cost of construction2,050,000Gross profit1,040,000Revenue from long-term contracts3,090,000
- Accounts receivable1,545,000Revenue from long-term contracts1,545,000
- Construction in progress1,250,000Cost of construction1,840,000Revenue from long-term contracts3,090,000
- Construction in progress420,000Cost of construction620,000Revenue from long-term contracts1,040,000
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