BE5-3 BE5-5

On July 1, 2013, 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 2014. Apache has no significant obligations to perform services after the sale. How much gross profit will Apache recognize in both 2013 and 2014 assuming point of delivery profit recognition? Ignore interest Installment sales applying the installment sales method? method LO3 BE 5-4 Refer to the situation described in BE 5-1. How much gross profit will Apache recognize in both 2013 and 201 Profit deferral applying the profit deferral method? method LO3 BE 5-5 Refer to the situation described in BE 5-1. What should be the balance in the deferred gross profit account at Installment sales end of 2014 applying the installment sales method? method LO3 BE 5-6 Meyer Furniture sells office furniture mainly to corporate clients. Customers who return merchandise within Right of return 90 days for any reason receive a full refund. Discuss the issues Meyer must consider in determining its reven