Prepare a table showing the amount of gp to be recognized

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On August 31, 2012, the company sold merchandise of the A corporation for 500,000. Terms of the sale called for a down payment of 100,000 & four annual installments of 100,000 due on each August 31, beginning August 31,2013. Each installment also will include interest on the unpaid balance applying an appropriate interest rate. The book value of the merchandise on "company" books on the date of sale was 300,000. The perpetual inventory system is used. The company's fiscal year-end is December 31.

1. Prepare a table showing the amount of GP to be recognized in each of the five years of the installment sale applying each of the following methods: Point of delivery revenue recognition, installment sales method and cost recovery method.

Reference no: EM13601764

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