Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant data are summarized below:

Contract amount		$	2,910,000
Cost:	2020		1,180,000
	2021		580,000
Gross profit:	2020		770,000
	2021		380,000
Contract billings:	2020		1,455,000
	2021		1,455,000

ADH recognizes revenue upon completion of the contract. In its December 31, 2020, balance sheet, ADH would report:

Multiple Choice

• The contract liability, billings in excess of cost, of $275,000.

• The contract asset, deferred profit, of $380,000.

• The contract asset, cost and profits in excess of billings, of $495,000.

• The contract asset, contract amount in excess of billings, of $1,455,000.