A company agreed to sell a property for $27,800. The property had a cost of $20,000 and
Question:
A company agreed to sell a property for $27,800. The property had a cost of $20,000 and accumulated depreciation of $8,325. The contract provided for a down payment of $4,500 to be received on January 1, 2008 and 5 consecutive payments of notes of $5,990 to be collected in every December 31. The interest rate of 9% is considered appropriate. The company’s fiscal year-end is December 31.
At the date of sale, the gross profit margin is.
At the date of sale, the balance in the deferred profit account is.
At the beginning of the second year, the balance of the unrecovered cost is.
Under the cost recovery method, the amount of the realized profit on sale of the property in the second year is.
Under the installment method, the amount of the realized profit on sale of the property in the first year is.
Andersons Business Law and the Legal Environment
ISBN: 978-1133587583
22nd edition
Authors: David P. Twomey, Marianne M. Jennings