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		$	3,045,000
Cost:	2017		1,210,000
	2018		610,000
Gross profit:	2017		815,000
	2018		410,000
Contract billings:	2017		1,522,500
	2018		1,522,500

ADH recognizes revenue upon completion of the contract. In its December 31, 2017, balance sheet, ADH would report:

Multiple Choice

The contract liability, billings in excess of cost, of $312,500.

The contract asset, deferred profit, of $410,000.

The contract asset, cost and profits in excess of billings, of $502,500.

The contract asset, contract amount in excess of billings, of $1,522,500.