During February, 2019, Jackson Jewels sells a brooch for $400,000. The cost to the business of this brooch was $215,000, resulting in a gross profit of $185,000. The $400,000 sales price is to be paid in four equal annual instalments on December 31 in each of the years 2020 through 2023. Jackson Jewels has a December 31 year end. Indicate the amount of the reserve that can be deducted, and the net business income, for each of the years 2019 through 2023.

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Calculation of reserve to be deducted and net income from 2019 to 2023 Year 2019 Total profi... View the full answer