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arizona desert homes (adh) constructed a new subdivision during 2023 and 2024 under contract with cactus development company. relevant data are summarized below:contract amount $ 3,000,000cost:20231,200,000 2024600,000 gross profit:2023800,000 2024400,000 contract billings:20231,500,000 20241,500,000adh recognizes revenue over time with respect to these contracts.what would be the journal entry made in 2023 to record revenue?
arizona desert homes (adh) constructed a new subdivision during 2023 and 2024 under contract with cactus development company. relevant data are summarized below:contract amount $ 3,000,000cost:20231,200,000 2024600,000 gross profit:2023800,000 2024400,000 contract billings:20231,500,000 20241,500,000adh recognizes revenue over time with respect to these contracts.what would be the journal entry made in 2023 to record revenue?
Final answer:In 2023, Arizona Desert Homes would make a journal entry to record the $1,500,000 of revenue recognized that year. The entry would debit Accounts Receivable and creditContract Revenue each by $1,500,000.Explanation:In 2023, Arizona Desert Homes (ADH) recognized revenue over time from a contract with Cactus Development Company. The journal entry they would make to record this revenue would require two parts: a debit and a credit. The debit increases the Accounts Receivable balance, which is an asset, by the amount billed to the customer. The credit increases the Revenue, which increases the owner's equity by the same amount.In 2023 the amount billed was$1,500,000. So, the journal entry would be:Debit: Accounts Receivable - $1,500,000Credit: Contract Revenue - $1,500,000Learn more about Journal Entry here:brainly.com/question/33762471#SPJ12...