Using the installment sale method of accounting

Assignment Help Financial Accounting

Reference no: EM131217481

Use the following information for the next two questions

Colton Company sold stud that cost $240,000 for $600,000 on January 1, 2015.

Cash collections were as follows

2015 $150,000

2016 $250,000

2017 $200,000

1) The profit to be recognized in the first year (2015) using the installment sale method of accounting is:

A) $90,000.00

B) $–0-

C) $100,000.00

D) $150,000.00

E) $184,426.23

2) The profit to be recognized in the second year (2016) using the cost recovery method of accounting is:

A) $143,442.62

B) 250,000.00

C) $10,000.00

D) $90,000.00

E) $160,000.00

Reference no: EM131217481

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