Question
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
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 |
| $3,000,000 |
| Actual cost: | 2017 | 1,500,000 |
|
| 2018 | 1,000,000 |
| Estimated costs to complete: | 2017 | 900,000 |
|
| 2018 | 0 |
| Contract billings: | 2017 | 1,600,000 |
|
| 2018 | 1,400,000 |
| Amounts collected: | 2017 | 1,300,000 |
|
| 2018 | 1,700,000 |
ADH recognizes revenue over time with respect to these contracts. Required:
Prepare the necessary journal entries, for 2017 and 2018, related to the above transactions.
How would the transactions above be disclosed in the 2017 financial statements (balance sheet and income statement)?
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Cost Accounting College Version
Authors: Steven M. Bragg
1st Edition
1938910702, 978-1938910708
