Question: During the year ended December 31 2012 an aircraft manufacturer
During the year ended December 31, 2012, an aircraft manufacturer sold a jet for $72 million; assume that the cost to produce the jet was $57 million. The customer agreed to pay the manufacturer $24 million per year, for three years, with the first payment made on December 31, 2012. Compute revenue, expense, and income before income taxes for each of the three years using the installment method and the cost recovery method.
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