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		$	3,315,000
Cost:	2017		1,270,000
	2018		670,000
Gross profit:	2017		905,000
	2018		470,000
Contract billings:	2017		1,657,500
	2018		1,657,500

ADH recognizes revenue upon completion of the contract. What is the journal entry in 2018 to record revenue?

Multiple Choice

• Construction in progress	1,375,000
  Cost of construction	1,940,000
  Revenue from long-term contracts		3,315,000

• Cost of construction	2,175,000
  Gross profit	1,140,000
  Revenue from long-term contracts		3,315,000

• Accounts receivable	1,657,500
  Revenue from long-term contracts		1,657,500

• Construction in progress	470,000
  Cost of construction	670,000
  Revenue from long-term contracts		1,140,000