Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus...
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 | $ | 3,315,000 | ||
| Cost: | 2017 | 1,270,000 | ||
| 2018 | 670,000 | |||
| Gross profit: | 2017 | 905,000 | ||
| 2018 | 470,000 | |||
| Contract billings: | 2017 | 1,657,500 | ||
| 2018 | 1,657,500 | |||
ADH recognizes revenue upon completion of the contract.
What is the journal entry in 2018 to record revenue?
Multiple Choice
-
Construction in progress 1,375,000 Cost of construction 1,940,000 Revenue from long-term contracts 3,315,000 -
Cost of construction 2,175,000 Gross profit 1,140,000 Revenue from long-term contracts 3,315,000 -
Construction in progress 470,000 Cost of construction 670,000 Revenue from long-term contracts 1,140,000
Homework Answers
Solution:
If ADH recognizes revenue upon completion of the contract, then journal entry in 2018 to record revenue is :
| Construction in progress | 1,375,000 | |
| Cost of construction | 1,940,000 | |
| Revenue from long-term contracts | 3,315,000 |
Hence first option is correct.
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Arizona Desert Homes (ADH) constructed a new subdivision during
2017 and 2018 under contract with Cactus...
Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus...
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 $ 3,315,000 Cost: 2017 1,270,000 2018 670,000 Gross profit: 2017 905,000 2018 470,000 Contract billings: 2017 1,657,500 2018 1,657,500 ADH recognizes revenue upon completion of the contract. What is the journal entry in 2018 to record revenue? Multiple Choice Construction in progress 1,375,000 Cost of construction 1,940,000 Revenue from long-term contracts 3,315,000 Cost of construction...
What is the correct answer? Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and...
What is the correct answer?
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: 2020 2021 Gross profit: $3,000,000 1,200,000 600,000 800,000 400,000 1,500,000 1,500,000 2020 2021 2020 2021 Contract billings: ADH recognizes revenue over time with respect to these contracts. For 2021, what is the journal entry to record revenue? Multiple Choice Cost of construction Grocs nofi + 2,000,000 1,000,000 Revenue from...
Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus...
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 $ 3,000,000 Cost: 2020 1,200,000 2021 600,000 Gross profit: 2020 800,000 2021 400,000 Contract billings: 2020 1,500,000 2021 1,500,000 ADH recognizes revenue over time with respect to these contracts. In its December 31, 2020, balance sheet, ADH would report: A) The contract asset, deferred profit, of $400,000. B) The contract asset, cost and profits in...
Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus...
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: 2020 2021 2020 2021 2020 2021 $3,180,000 1,240,000 640,000 860,000 440,000 1,590,000 1,590,000 Contract billings: ADH recognizes revenue upon completion of the contract. In its December 31, 2020, balance sheet, ADH would report: Multiple Choice C ) The contract asset, contract amount in excess of billings, of $1,590,000. The contract asset, deferred...
ABZ constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant...
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During 2017, Pearl Company started a construction job with a contract price of $1,610,000. The job...
During 2017, Pearl Company started a construction job with a
contract price of $1,610,000. The job was completed in 2019. The
following information is available.
2017
2018
2019
Costs incurred to date
$434,300
$859,560
$1,073,000
Estimated costs to complete
575,700
242,440
–0–
Billings to date
301,000
897,000
1,610,000
Collections to date
271,000
817,000
1,428,000
A) Compute the amount of gross profit to be recognized each
year, assuming the percentage-of-completion method is used.
Gross profit recognized in 2017 $ 258,000
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During 2017, Nilsen Company started a construction job with a contract price of $1,600,000. The job...
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What is the correct answer?
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: 2020 2021 Gross profit: $3,000,000 1,200,000 600,000 800,000 400,000 1,500,000 1,500,000 2020 2021 2020 2021 Contract billings: ADH recognizes revenue over time with respect to these contracts. For 2021, what is the journal entry to record revenue? Multiple Choice Cost of construction Grocs nofi + 2,000,000 1,000,000 Revenue from...
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: 2020 2021 2020 2021 2020 2021 $3,180,000 1,240,000 640,000 860,000 440,000 1,590,000 1,590,000 Contract billings: ADH recognizes revenue upon completion of the contract. In its December 31, 2020, balance sheet, ADH would report: Multiple Choice C ) The contract asset, contract amount in excess of billings, of $1,590,000. The contract asset, deferred...
During 2017, Pearl Company started a construction job with a
contract price of $1,610,000. The job was completed in 2019. The
following information is available.
2017
2018
2019
Costs incurred to date
$434,300
$859,560
$1,073,000
Estimated costs to complete
575,700
242,440
–0–
Billings to date
301,000
897,000
1,610,000
Collections to date
271,000
817,000
1,428,000
A) Compute the amount of gross profit to be recognized each
year, assuming the percentage-of-completion method is used.
Gross profit recognized in 2017 $ 258,000
Gross...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10-20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
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