[Solved] Gupta Industries Received a $300,000 Prepayment from Packard Associates for the Sale

Question 157
Multiple Choice

Gupta Industries received a $300,000 prepayment from Packard Associates for the sale of new equipment.Gupta will bill Packard an additional $100,000 upon delivery of the equipment.Upon receipt of the $300,000 prepayment,how much should Holt recognize for a contract asset,a contract liability,and accounts receivable?

A)Contract asset: $0;contract liability: $300,000,accounts receivable,$0.
B)Contract asset: $300,000;contract liability: $0,accounts receivable,$0.
C)Contract asset: $0;contract liability: $300,000,accounts receivable,$100,000.
D)Contract asset: $300,000;contract liability: $0,accounts receivable,$100,000.

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