Company instead uses the cost recovery method

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1.Wolf Computer Company began operations in 2013. The company allows customers to pay in installments for many of its products. Installment sales for 2013 were $1,000,000. If revenue is recognized at the point of delivery, $600,000 in gross profit would be recognized in 2013. If the company instead uses the cost recovery method, $100,000 in gross profit would be recognized in 2013.

Required:
1. What was the amount of cash collected on installment sales in 2013?
2. What amount of gross profit would be recognized if the company uses the installment sales method?

Reference no: EM13883126

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