Maple Corporation sells farm machinery on the installment plan. On July 1, 2014, it entered into an
Question:
• The amount that would be realized on an outright sale of similar farm machinery is $556,000.
• The cost of the farm machinery sold to Agriculture is $417,000.
• The finance charges relating to the installment period are $244,000 based on a stated interest rate of 12%, which is appropriate.
• Circumstances are such that the collection of the installments due under the contract is reasonably assured.
Required:
What income or loss before income taxes should Maple record for the year ended December 31, 2014, as a result of this transaction? Show supporting computations in good form.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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