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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 $3,405,000
Cost: 2017 1,290,000
2018 690,000

Gross profit: 2017 935,000
2018 490,000

Contract billings: 2017 1,702,500
2018 1,702,500

ADH recognizes revenue upon completion of the contract. In its December 31, 2017, balance sheet, ADH would report:_______

Respuesta :

Answer:

Contract amount = liablity :unearned revenue = $3405000

contract cost are setoff against contract billings and determine difference to be asset or liability

contract billings = ( $1702500-$1290000) = 412500 = liability

Explanation:

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