Question

Baker Company is a real estate developer that began operations on January 2, 2014. It appropriately uses the installment method of revenue recognition. Baker’s sales are made on the basis of a 10% down payment with the balance payable over 30 years. Baker’s gross profit percentage is 40%. Relevant information for Baker’s first two years of operations follows:


Required:
1. At December 31, 2014, Baker’s deferred gross profit was how much?
2. Baker’s realized gross profit for 2015 was howmuch?


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  • CreatedSeptember 10, 2014
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