Question: On January 2 2014 Yardley Company sold a plant to

On January 2, 2014, Yardley Company sold a plant to Ivory Inc. for $1,500,000. On that date, the plant’s carrying cost was $1,000,000. Ivory gave Yardley $300,000 cash and a $1,200,000 note, payable in four annual installments of $300,000 cash plus 12% interest. Ivory made the first principal and interest payment of $444,000 on December 31, 2014. Yardley uses the installment method of revenue recognition.

In its 2014 income statement, what amount of realized gross profit should Yardley report?

View Solution:

Sale on SolutionInn
  • CreatedSeptember 10, 2014
  • Files Included
Post your question