Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below:

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		$	2,775,000
Cost:	2017		1,150,000
	2018		550,000
Gross profit:	2017		725,000
	2018		350,000
Contract billings:	2017		1,387,500
	2018		1,387,500

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

A. The contract liability, billings in excess of cost, of $237,500.

B. The contract asset, cost and profits in excess of billings, of $487,500.

C. The contract asset, deferred profit, of $350,000.

D. The contract asset, contract amount in excess of billings, of $1,387,500.