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Grey operates as a retail fabric seller. Some customers pick out rolls of fabric and place deposits with Grey to set the rolls aside for
Grey operates as a retail fabric seller. Some customers pick out rolls of fabric and place deposits with Grey to set the rolls aside for future delivery. Grey records the cash receipts on these transactions as layaway plan sales. However, title to the fabric passes to the customer only when the full sales price is received by Grey. The average gross margin on the fabric is 75% of sales. The following pertinent data were taken from Grey's December 31 unadjusted trial balance: Regular sales $2,500,000 Layaway plan sales $1,000,000 Deposits from customers 50 An analysis of the layaway plan sales revealed that $600,000 was received in full payment for fabric delivered to customers during the year. In Greys December 31 balance sheet, deposits from customers will be
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