On july 1 2016 apache company a real estate developer sold

Assignment Help Accounting Basics

Reference no: EM13587775

On July 1, 2016, Apache Company, a real estate developer, sold a parcel of land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2017. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company?

I believe that the journal entry for this problem looks like this:

Accts. Rec.	2,850,000
Deferred Revenue		2,850,000

Cash	150,000
Revenue		150,000

Which means that the amount of revenue recognized in 2016 is $150,000. Does the book value of the land play a part in this problem?

Reference no: EM13587775

Questions Cloud

In an experiment 250 ml of a gas with a pressure of 100 atm : question in an experiment 25.0 ml of a gas with a pressure of 1.00 atm is contained in a balloon at 25.0 oc. the

The companys variable costs are 75 of the sales price per : the companys variable costs are 75 of the sales price per unit and their fix costs are 240000. if the company earned

What is the minimum score among those who received an f if : 1. a professor at a loca community noted that the grades of hi s students were normally distrubuted with a mean of 74

Background understanding accounting information goes far : background understanding accounting information goes far beyond the ability to record correct journal entries. it is

On july 1 2016 apache company a real estate developer sold : on july 1 2016 apache company a real estate developer sold a parcel of land to a construction company for 3000000. the

Michael bolton company follows the practice of pricing its : michael bolton company follows the practice of pricing its inventory at the lower-of-cost-or-market on an

You are hired to review the accounting records of sophia : you are hired to review the accounting records of sophia corporation before it closes its revenue and expense accounts

Byp4-5 purpose to learn about the functions of the : byp4-5 purpose to learn about the functions of the securities and exchange commission sec. address

A student dissolves some ammonium nitrate nh4no3 in water : question a student dissolves some ammonium nitrate nh4no3 in water notices that the beaker gets cooler as the solid

User Account

All Pages