Desert Homes (DH) constructed a new subdivision during 2017 and 2018 under contract with Actus 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 DH recognizes revenue over time with respect to these contracts. What would be the journal entry made in 2017 to record revenue? A) Accounts receivable 1,500,000 Revenue from long-term contracts 1,500,000 B) Accounts receivable 2,300,000 Gross profit 800,000 Revenue from long-term contracts 1,500,000 C)
Desert Homes (DH) constructed a new subdivision during 2017 and 2018 under contract with Actus 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 |
|
DH recognizes revenue over time with respect to these contracts.
What would be the
A)
|
|
1,500,000 |
|
|
Revenue from long-term contracts |
|
1,500,000 |
B)
|
Accounts receivable |
2,300,000 |
|
|
Gross profit |
|
800,000 |
|
Revenue from long-term contracts |
|
1,500,000 |
C)
|
Construction in progress |
800,000 |
|
|
Cost of construction |
1,200,000 |
|
|
Revenue from long-term contracts |
|
2,000,000 |
D)
|
Accounts receivable |
1,500,000 |
|
|
Billings in excess of cost |
300,000 |
|
|
Revenue for long-term contracts |
|
1,800,000 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
