Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant data are summarized below: Contract amount $3,000,000 Cost:2020 1,200,000 2021 600,000 Gross profit:2020 800,000 2021 400,000 Contract billings:2020 1,500,000 2021 1,500,000 ADH recognizes revenue upon completion of the contract. In its December 31, 2020, balance sheet, ADH would report: Multiple Choice The contract asset, cost and profits in excess of billings, of $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.