1. During 2012, Martin Corporation sold merchandise costing $2,800,000 on an installment basis for $4,000,000. The cash receipts related to these sales were collected as follows: 2012, $1,600,000; 2013, $1,400,000; 2014, $1,000,000. What amount would be shown in the December 31, 2013 financial statements for realized gross profit on 2012 installment sales, and deferred gross profit on 2012 installment sales, respectively?

Select one:

a. $420,000 and $300,000

b. $780,000 and $420,000

c. $300,000 and $900,000

d. $420,000 and $900,000

2. Coaster manufactures and sells logging equipment. Due to the nature of its business, Coaster is unable to reliably predict bad debts. During 2012, Coaster sold equipment costing $3,600,000 for $5,400,000. The terms of the sale were 20% down, with equal payments due quarterly over the next 3 years. All payments for 2012 were made on schedule. Round answers to two places. Assuming that Coaster uses the installment method of accounting for its installment sales, what amount of realized gross profit will Coaster report in its income statement for the year ended December 31, 2012?

Select one:

a. $2,520,000

b. $1,680,000

c. $ 840,000

d. $ 554,400

3. During 2012, Martin Corporation sold merchandise costing $2,800,000 on an installment basis for $4,000,000. The cash receipts related to these sales were collected as follows: 2012, $1,600,000; 2013, $1,400,000; 2014, $1,000,000.

If expenses, other than the cost of the merchandise sold, related to the 2012 installment sales amounted to $160,000, by what amount would Martins net income for 2012 increase as a result of installment sales?

Select one:

a. $1,440,000

b. $ 480,000

c. $ 360,000

D. $ 320,000

4.

Seasons Construction is constructing an office building under contract for Cannon Company. The contract calls for progress billings and payments of $930,000 each quarter. The total contract price is $11,160,000 and Seasons estimates total costs of $10,650,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2012. At December 31, 2013, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $10,800,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Seasons will recognize for the year ended December 31, 2013?

Select one:

a. $8,100,000

b. $4,725,000

c. $4,792,500

d. $4,905,000