Sahara Desert Homes (SDH) reports under IFRS and constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below: SDH uses the cost recovery method under IFRS to recognize revenue.
- What is SDH's journal entry to record revenue in 2018?

Question

Sahara Desert Homes (SDH) reports under IFRS and constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below:  SDH uses the cost recovery method under IFRS to recognize revenue.
- What is SDH's journal entry to record revenue in 2018?

Quizplus · Accepted Answer

Under the IFRS cost recovery method, record equal amounts of revenue and cost until cost recovered, and then record gross profit. In 2017, recorded revenue and cost of $1,200,000, so record remaining cost of $600,000 and all gross profit of $1,200,000 in 2018.

Sahara Desert Homes (SDH) Reports Under IFRS and Constructed a New