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A. Progress billings as deferred income, construction in progress as a deferred expense.
B. Progress billings as income, construction in progress as inventory.
C. Net, as a current asset if debit balance and current liability if credit balance.
D. Net, as gross profit from construction if credit balance, and loss from construction if debit balance.
B. Progress billings as income and, construction in progress as inventory.
but to clarify:
Y1:
Dr. Construction in process
Cr. Accounts payable
Y1: then billings to contra account
Dr. Contracts receivable
Cr. Progress Billings
Then to reflect the gross profit, revenues and expenses:
Dr. Construction in progress
Dr. Construction expense
Cr. Construction revenue
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