Recognition of gross profit from the sale

Reference no: EM13131297

On January 1, Pacer Co. sold land that cost $20,000 for $50,000, receiving a note bearing interest at 5%. The note will be paid in three annual installments of $18,360 starting on December 31. Because collection of the note was deemed to be very uncertain, Pacer chose to use the cost recovery method. The first installment payment of $18,360 was received on Dec. 31. How much gross profit from this sale should Pacer recognize on the December 31 income statement?

Reference no: EM13131297

Questions Cloud

Comparability of the resulting financial statements : To what extent might companies' useof these different treatments reduce the comparability of the resulting financial statements?

Compute the sample mean-median-mode and midrange : From this data set, compute the sample mean, median, mode and midrange. Compute the 1st quartile and 3rd and interpret their meanings.

Determining minimizing cost : There are two companies, the IL Company and the MO Company. They are trying to build a 3000 ft. tunnel connecting St. Louis, IL and St. Louis, MO.

Describe what audit procedures should be used : You are a senior auditor working on a client who holds a large portfolio of mortgage obligations. Due to the soft housing market, the client has established a fairly significant loan loss reserve.

Recognition of gross profit from the sale : The first installment payment of $18,360 was received on Dec. 31. How much gross profit from this sale should Pacer recognize on the December 31 income statement?

Implications-contrapositives and converses : Use truth tables to prove that an implication is always equivalent to its contrapositive. Site an example where this is so. Use truth tables to prove that an implication may not be equivalent to its converse. Site an example where this is so.

Explain stakeholder theory : Construction-based business of your choice and explain stakeholder theory to illustrate the primary interests of the stakeholder groups and identify any areas of potential conflict between the stakeholder groups.

Compute probability of selecting a credit card customer : The distribution of amounts spent is approximately normal with a standard deviation of $10. Compute the probability of selecting a credit card customer at random and finding the customer charged between $70 and $83.

Which measures amount of earnings that may be distributed : An S corporation's accumulated adjustments account, which measures the amount of earnings that may be distributed tax-free (cpa adapted)

User Account

All Pages