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Question - Karr Co. began operations on January 1, 1988, and appropriately uses the installment method of accounting. The following information pertains to Karr's operations for 1988:
Installment Sales $800,000
Cost of Installment Sales 480,000
General and Admin Expenses 80,000
Collections on Installment Sales 300,000
The balance in the deferred gross profit account at December 31, 1988 should be:
a. $120,000
b. $150,000
c. $200,000
d. $320,000
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