Iowa Development (ID) made the following land sales and had the following cash collections:

2012 sold Altoona land for 2,000,000 that cost ID $1,200,000. The land agreement required payments of $1,000,000 within one week of occupancy of the land, and the other $1,000,000 in 2013 ID received the $1,000,000 payment.

2013 Sold Boone land for $2,400,000 that cost ID $1,200,000. The land agreement required payments of $800,000 within one week of occupancy of the land and additional payments of $800,000 in 2014 and 2015. ID received the $800,000 payment and also a $500,000 payment for the Altoona land.

Assume ID cannot estimate uncollectible accounts accurately and recognizes revenue using the IFRS method for significant uncertainty in collectibility.

Required:

Prepare journal entries to record the sale, cash collections, and recognition of gross profit (if appropriate) in 2012 and 2013.

Answer rating: 100% (QA)

Assume ID cannot es... View the full answer