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Question - On January 1, 2012, Wetzel Company sold property for $250,000. The note will be collected as follows: $120,000 in 2012, $90,000 in 2013, and $40,000 in 2014. The property had cost Wetzel $150,000 when it was purchased in 2010.
Instructions -
(a) Compute the amount of gross profit realized each year, assuming Wetzel uses the cost-recovery method.
(b) Compute the amount of gross profit realized each year, assuming Wetzel uses the installment-sales method.
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