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Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Rele

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Answer #1

Solution:

  • The contract liability ,billings in excess of cost , of $ 3,50,000

Explanation:

Calculation of completion method:

Particulars Amount Amount
Cost + profit

= $ 12,40,000 + $ 0

= $ 12,40,000

$ 12,40,000
Contract billings $ 15,90,000 $ 15,90,000
Excess billing

= $ 15,90,000 - $ 12,40,000

= $ 3,50,000

$ 3,50,000
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