Compute the realized gross profit to be reported

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On January 1, 2015, UTANGMUNA ENTERPRISES old a real property for P250,000. Promissory notes issued for specific amounts will be due on the following dates: P120,000 in 2015, P90,000 in 2016, and P40,000 in 2017. The property had cost UTANGMUNA P150,000 when it was purchased in 2013.

Problem 1) Compute the realized gross profit to be reported in 2017 under the cost recovery method:

A. 100,000

B. 40,000

C. 60,000

D. 0

Problem 2) Compute the realized gross profit to be reported in 2017 under the installment sales method.

A. 100,000

B. 60,000

C. 16,000

D. 48,000

Problem 3) Compute the realized gross profit to be reported in 2017 under the installment sales method.

A. 100,000

B. 60,000

C. 16,000

D. 48,000

Reference no: EM132917394

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