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Noah Construction Company is building a large complex for a contract price of $5,000,000. This...

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Accounting

Noah Construction Company is building a large complex for a contract price of $5,000,000. This is a three-year project and the requirements for recognizing revenue over time are met. The total estimated cost of the project is $4,000,000 and the following information is available:
Which one of the following entries would be made in Year 1 to record the costs incurred assuming revenue is recognized over time?
A) DR Inventory: Construction in progress $1,000,000CR Accounts payable, cash, etc. $1,000,000
B) DR Inventory: Construction in progress $1,000,000CR Income on long-term construction contract $1,000,000
C) DR Inventory: Construction in progress $1,000,000CR Billings $1,000,000
D) DR Income on long-term construction contract $1,000,000CR Accounts payable, cash, etc. $1,000,000
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