During 2014, Vaughn Corporation sold merchandise costing $2,250,000 on an installment basis for $3,000,000. The cash receipts related to these sales were collected as follows: 2014, $1,200,000; 2015, $1,050,000; 2016, $750,000.

15. What is the rate of gross profit on the installment sales made by Vaughn Corporation during 2014?

a. 75% b. 60% c. 40% d. 25%

16. If expenses, other than the cost of the merchandise sold, related to the 2014 installment sales amounted to $135,000, by what amount would Vaughns net income for 2014 increase as a result of installment sales? a. $ 165,000 b. $ 266,250 c. $ 300,000 d. $1,065,000

17. What amount would be shown in the December 31, 2015 financial statement for realized gross profit on 2014 installment sales, and deferred gross profit on 2014 installment sales, respectively? a. $262,500 and $562,500 b. $487,500 and $262,500 c. $562,500 and $187,500 d. $262,500 and $187,500