Installment sale method of accounting for this transaction

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Reference no: EM13864749

On December 15,2013, Rigsby Sales Co. sold a tract of land that cost $3600000 for $4500000. Rigsby appropriately uses the installment sale method of accounting for this transaction. Terms called for a down payment of $500000 with the balance in two equal annual instalments payable on December 15,2014 and December 15,2015. Ignore interest charges. Rigsby has a December31 year-end

1: in 2013, Rigsby would recognize realized gross profits of

2: in 2014, Rigsby would recognize realized gross profits of

3: In its December 31, 2013, balance sheet, Rigsby would report:

A Realized gross profit of $100000

B: Deferred gross profit of $100000

C: Instalment receivables(net) of $3200000

D: Instalment receivables(net) of $4000000

4: At Dec 31,2014, Rigsby would report in its balance sheet:

A: Realized gross profit of $500000

B: Deferred gross profit of $400000

C: Realized gross profit of $400000

D: Cost of instalment sales $1600000

Reference no: EM13864749

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