On July 1, 2011, Apache Company sold a parcel of undeveloped land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2012. Apache has no significant obligations to perform services after the sale. How much gross profit will Apache recognize in both 2011 and 2012 assuming point of delivery profit recognition?
Answer to relevant QuestionsRefer to the situation described in BE 5-1. How much gross profit will Apache recognize in both 2011 and 2012 applying the installment sales method?In BE 5-1, On July 1, 2011, Apache Company sold a parcel of undeveloped ...Refer to the situation described in BE 5-6. During the first year the company billed its customer $7 million of which $5 million was collected before year-end. What would appear in the year-end balance sheet related to this ...Universal Calendar Company began the year with accounts receivable and inventory balances of $100,000 and $80,000, respectively. Year-end balances for these accounts were $120,000 and $60,000, respectively. Sales for the ...On July 1, 2011, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of the sale called for a down payment of $75,000 and three annual installments of $75,000 due on each July 1, beginning July 1, ...In 2011, Long Construction Corporation began construction work under a three-year contract. The contract price is $1,600,000. Long uses the percentage-of-completion method for financial reporting purposes. The financial ...
Post your question