Question
rizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant data are summarized below: Contract amount
rizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant data are summarized below:
| Contract amount | $ | 2,640,000 | ||
| Cost: | 2020 | 1,120,000 | ||
| 2021 | 520,000 | |||
| Gross profit: | 2020 | 680,000 | ||
| 2021 | 320,000 | |||
| Contract billings: | 2020 | 1,320,000 | ||
| 2021 | 1,320,000 | |||
ADH recognizes revenue upon completion of the contract. What is the journal entry in 2021 to record revenue?
Multiple Choice
-
Cost of construction 1,800,000 Gross profit 840,000 Revenue from long-term contracts 2,640,000 -
Construction in progress 320,000 Cost of construction 520,000 Revenue from long-term contracts 840,000 -
Construction in progress 1,000,000 Cost of construction 1,640,000 Revenue from long-term contracts 2,640,000 -
Accounts receivable 1,320,000 Revenue from long-term contracts 1,320,000
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Audit Management And Supervision Wiley Ronald Institute Of Internal Auditors Professional Book Series
Authors: Gil W. Courtemanch, Guilbert W. Courtemanche
1st Edition
0471625655, 978-0471625650
