Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

choose correct ans Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski

image text in transcribedchoose correct ans

Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the installment sales method for revenue recognition. In 2017, Lake began operations and sold jet skis with a total price of $1,140,000 that cost Lake $570,000. Lake collected $380,000 in 2017, $380,000 in 2018, and $380,000 in 2019 associated with those sales. In 2018, Lake sold jet skis with a total price of $1,650,000 that cost Lake $990,000. Lake collected $550,000 in 2018, $390,000 in 2019, and $390,000 in 2020 associated with those sales. In 2020, Lake also repossessed $320,000 of jet skis that were sold in 2018. Those jet skis had a fair value of $120,000 at the time they were repossessed. Total cash collections on installment sales during 2018 would be: Multiple Choice 0 $0. $930,000. $830,000. O $380,000. $380,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Auditing

Authors: Walter Gerry Kell, William C. Boynton, Richard E. Ziegler

5th Edition

0471542830, 9780471542834

More Books

Students also viewed these Accounting questions

Question

Define promotion.

Answered: 1 week ago

Question

Write a note on transfer policy.

Answered: 1 week ago

Question

Discuss about training and development in India?

Answered: 1 week ago

Question

Explain the various techniques of training and development.

Answered: 1 week ago