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 Cost: Gross profit: Contract billings: $3,000,000 2020 1,200,000 2021 2020 2021 2020 1,500,000 2021 1,500,000 600,000 800,000 400,000 ADH recognizes revenue over time with respect to these contracts. Multiple Choice n its December 31, 2020, balance sheet, ADH would report: The contract asset, cost and profits in excess of billings, of $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.
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 Cost: Gross profit: Contract billings: $3,000,000 2020 1,200,000 2021 2020 2021 2020 1,500,000 2021 1,500,000 600,000 800,000 400,000 ADH recognizes revenue over time with respect to these contracts. Multiple Choice n its December 31, 2020, balance sheet, ADH would report: The contract asset, cost and profits in excess of billings, of $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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11).
Transcribed Image Text: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
Cost:
Gross profit:
Contract billings:
ADH recognizes revenue over time with respect to these contracts.
Multiple Choice
$3,000,000
1,200,000
In its December 31, 2020, balance sheet, ADH would report:
O
2020
2021
600,000
2020
800,000
2021
400,000
2020
1,500,000
2021 1,500,000
O
The contract asset, cost and profits in excess of billings, of $500,000.
The contract liability, billings in excess of cost, of $300,000.
The contract asset, contract amount in excess of billings, of $1,500,000.
The contract asset, deferred profit, of $400,000.
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