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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
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 | ||
| Cost: | 2017 | 1,200,000 | ||
| 2018 | 600,000 | |||
| Gross profit: | 2017 | 800,000 | ||
| 2018 | 400,000 | |||
| Contract billings: | 2017 | 1,500,000 | ||
| 2018 | 1,500,000 | |||
ADH recognizes revenue over time with respect to these contracts. What would be the journal entry made in 2017 to record revenue?
| Accounts receivable | 1,500,000 | |
| Billings in excess of cost | 300,000 | |
| Revenue for long-term contracts | 1,800,000 |
| Construction in progress | 800,000 | |
| Cost of construction | 1,200,000 | |
| Revenue from long-term contracts | 2,000,000 |
| Accounts receivable | 2,300,000 | |
| Gross profit | 800,000 | |
| Revenue from long-term contracts | 1,500,000 |
| Accounts receivable | 1,500,000 | |
| Revenue from long-term contracts | 1,500,000 |
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