have 53 multiple choice accounting question
1. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012.In its 2010 year-end balance sheet, Reliable would report installment receivables (net) of A. B. C. D. $20,000. 25,909. $35,000. $10,000. 2. Chancellor Ltd. sells an asset with a $1 million fair value to Sophie Inc. Sophie agrees to make 6 equal payments, one year apart, commencing on the date of sale. The payments include principal and 6% annual interest. Compute the annual payments. A. B. C. D. $166,651 $135,252 $191,852 $203,351 3. In 2011, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): Accounts receivable (from construction progress billings) $37.5 Actual construction costs incurred in 2011 $135 Cash collected on project during 2011 $105 Construction in progress, 12/31/11 $207 Estimated percentage of completion during 2011 60% What were the construction billings by CCC during 2011? A. B. C. D. $67.5 million $225 million $142.5 million $37.5 million 4. First Financial Auto Loan Department wishes to know the payment required at the first of each month on a $10,500, 48-month, 11% auto loan. To determine this amount, First Financial would A. B. C. D. Divide $10,500 by the future value of an ordinary annuity of 1. Multiply $10,500 by the present value of 1. Divide $10,500 by the present value of an annuity due of 1. Multiply $10,500 by the present value of an ordinary annuity of 1. 5. In 2011, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): Accounts receivable (from construction progress billings) $37.5 Actual construction costs incurred in 2011 $135 Cash collected on project during 2011 $105 Construction in progress, 12/31/11 $207 Estimated percentage of completion during 2011 60% What is the fixed contract price for CCC's project? A. B. C. D. $120 million $225 million $72 million $345 million 6. To determine the future value factor for an annuity due for period n when given tables only for an ordinary annuity: A. B. C. D. Obtain the FVA factor for n 1 and add 1. Obtain the FVA factor for n and deduct 1. Obtain the FVA factor for n + 1 and add 1. Obtain the FVA factor for n + 1 and deduct 1. 7. Shady Lane's income tax payable account decreased from $14 million to $12 million during 2011. If its income tax expense was $80 million, what would be shown as an operating cash flow under the direct method? A. B. C. D. A cash outflow of $82 million A cash outflow of $12 million A cash outflow of $80 million A cash outflow of $78 million 8. At the end of the next four years, a new machine is expected to generate net cash flows of $8,000, $12,000, $10,000, and $15,000, respectively. What are the (rounded) cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation? A. B. C. D. $32,400 $41,556 $39,982 $38,100 9. Present and future value tables of $1 at 3% are presented below: Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $100,000 four years from now. How much must Shane deposit to accomplish his goal? A. $78,941 B. $25,336 C. $88,849 D. $22,510 10. Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed. In 2010, Lake would recognize realized gross profit of A. B. C. D. $0. $150,000. $300,000. $450,000. 11. Cendant Corporation's results for the year ended December 31, 2011, include the following material items: Sales revenue $6,200,000 Cost of goods sold 3,800,000 Selling and administrative expenses 1,300,000 Loss on sale of investments 200,000 Loss on discontinued operations 500,000 Loss on expropriation (unusual and infrequent event) 800,000 Restructuring costs 80,000 Overstatement of amortization expense in 2010 caused by mathematical error 60,000 Cendant Corporation's income from continuing operations before income taxes for 2011 is A. B. C. D. $900,000. $820,000. $880,000. $320,000. 12. Indiana Co. began a construction project in 2011 that will provide it $150 million when it is completed in 2013. During 2011, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. Using the percentage-of-completion method, Indiana recognized _______ on the project in 2011. A. B. C. D. $36 million loss $9 gross profit no gross profit or loss $6 million loss 13. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012.In 2011, Reliable would recognize gross profit of A. B. C. D. $5,000. $10,000. $0. $6,000. 14. On October 28, 2011, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2011, the end of the company's fiscal year. The division's loss from operations for 2011 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $3,500,000, respectively. What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2011 income statement? A. $2,500,000 loss B. $500,000 gain included in continuing operations and a $2,000,000 loss from discontinued operations C. None D. $2,000,000 loss 15. Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2011: Operating income $250,000 Extraordinary gain $70,000 All income statement items are subject to a 40% income tax rate. In its 2011 income statement, Freda's separately stated income tax expense and total income tax expense would be A. B. C. D. $128,000 and $128,000, respectively. $100,000 and $100,000, respectively. $100,000 and $128,000, respectively. $128,000 and $100,000, respectively. 16. Indiana Co. began a construction project in 2011 that will provide it $150 million when it is completed in 2013. During 2011, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. In 2012, Indiana incurred costs of $58.5 million and estimated an additional $40.5 million in costs to complete the project. Using the percentage-of-completion method, Indiana recognized _______ on the project in 2012. A. B. C. D. $15 million gross profit $6 million gross profit $1.5 million gross profit $13.5 million gross profit 17.Elmore Co. purchased an offset press on January 1, 2008, at a cost of $120,000. The press had an estimated eight-year life with no residual value. Elmore uses straight-line depreciation. At January 1, 2011, Elmore estimated that the press would have only three more years of remaining life with no residual value. For 2011, Elmore would report depreciation of A. B. C. D. $15,000. $25,000. $20,000. $30,000. 18. In 2011, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): Accounts receivable (from construction progress billings) $37.5 Actual construction costs incurred in 2011 $135 Cash collected on project during 2011 $105 Construction in progress, 12/31/11 $207 Estimated percentage of completion during 2011 60% How much cash remains to be collected by CCC on the project? A. B. C. D. $202.5 million The answer can't be determined from the given information. $240 million $70 million 19. Indiana Co. began a construction project in 2011 that will provide it $150 million when it is completed in 2013. During 2011, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. Suppose that, in 2012, Indiana incurred costs of $63.75 million and estimated an additional $42.75 million in costs to complete the project. Using the percentage-of-completion method, Indiana recognized ________ on the project in 2012. A. B. C. D. $3.75 million loss $5.25 million gross profit $1 million loss $7.5 million gross profit 20. Present and future value tables of $1 at 3% are presented below: Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $100,000 four years from now. How much must Shane deposit to accomplish his goal? A. B. C. D. $22,510 $88,849 $78,941 $25,336 21. Misty Company reported the following before-tax items during the current year: Sales $600 Operating expenses 250 Restructuring charges 20 Extraordinary loss 50 Misty's effective tax rate is 40%. What would be Misty's income before extraordinary item(s)? A. B. C. D. $330 $360 $198 $210 22. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012.In 2010, Reliable would recognize gross profit of A. B. C. D. $25,000. $8,333. $8,090. $0. 23. Davenport Inc. offers a new employee a lump sum signing bonus at the date of employment. Alternatively, the employee can take $30,000 at the date of employment and another $50,000 two years later. Assuming the employee's time value of money is 8% annually, what lump sum at employment date would make her indifferent between the two options? A. B. C. D. $62,867 $60,000 $80,000 $72,867 24. On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011. The following additional facts pertain to the transaction: * The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. * The book value of Footwear's assets totaled $48 million on the date of the sale. * Footwear's operating income was a pretax loss of $10 million in 2011. * Foxtrot's income tax rate is 40%. Suppose that the Footwear Division's assets had not been sold by December 31, 2011, but were considered held for sale. Assume that the fair value of these assets at December 31 was $80 million. In the 2011 income statement for Foxtrot Co., under discontinued operations it would report a A. B. C. D. $6 million loss $13.2 million income 16% gain. $10 million loss 25. On October 1, 2011, Justine Company purchased equipment from Napa Inc. in exchange for a noninterest-bearing note payable in five equal annual payments of $500,000, beginning Oct 1, 2012. Similar borrowings have carried an 11% interest rate. The equipment would be recorded at A. B. C. D. $2,115,270. $2,225,000. $2,500,000. $1,847,950. 26. Harley Davis Inc. started its unicycle manufacturing business in 2009 and acquired $600,000 of equipment at the beginning of 2009. It decided to use the double-declining balance (DDB) depreciation on its equipment with no residual value and a 10-year useful life. In 2011 it changed to the straight-line depreciation method. Depreciation computed for 2009-2010 is presented below: Year DDB 2009 $120,000 2010 96,000 In 2011, Harley Davis would report depreciation of A. $60,000. B. $48,000. C. $96,000. D. $38,400. . 27. Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed. In 2013, Lake would record a loss on repossession of A. B. C. D. $120,000. $200,000. $80,000. $45,000. 28. Simpson Mining is obligated to restore leased land to its original condition after its excavation activities are over in three years. The cash flow possibilities and probabilities for the restoration costs in three years are as follows: Cash Outflow Probability $100,000 40% 150,000 30% 200,000 30% The company's credit-adjusted risk-free interest rate is 5%. The liability that Simpson must record at the beginning of the project for the restoration costs is A. $172,768. B. $129,576. C. $145,000. D. $125,257. The company's credit-adjusted risk-free interest rate is 5%. The liability that Simpson must record at the beginning of the project for the restoration costs is A. B. C. D. $145,000. $129,576. $172,768. $125,257. 29. On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011. The following additional facts pertain to the transaction: * The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. * The book value of Footwear's assets totaled $48 million on the date of the sale. * Footwear's operating income was a pretax loss of $10 million in 2011. * Foxtrot's income tax rate is 40%. Suppose that the Footwear Division's assets had not been sold by December 31, 2011, but were considered held for sale. Assume that the fair value of these assets at December 31 was $40 million. In the 2011 income statement for Foxtrot Co., it would report a loss from discontinued operations of A. B. C. D. $3 million loss $18 million loss $10.8 million loss $10 million loss 30. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012.In its 2011 year-end balance sheet, Reliable would report installment receivables (net) of A. B. C. D. $20,000. $0. $4,000. $15,000. 31. In 2011, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): Accounts receivable (from construction progress billings) $37.5 Actual construction costs incurred in 2011 $135 Cash collected on project during 2011 $105 Construction in progress, 12/31/11 $207 Estimated percentage of completion during 2011 60% What is the amount of gross profit on the project recognized by CCC during 2011? A. B. C. D. $160 million $72 million The answer can't be determined from the given information. $48 million 32. Lucia Ltd. reported net income of $135,000 for the year ended December 31, 2011. January 1 balances in accounts receivable and accounts payable were $29,000 and $26,000 respectively. Year-end balances in these accounts were $30,000 and $24,000, respectively. Assuming that all relevant information has been presented, Lucia's cash flows from operating activities would be A. B. C. D. $132,000. $136,000. $134,000. $138,000. 33. Jacobsen Corporation prepares its financial statement applying U.S. GAAP. During its 2011 fiscal year, the company reported before-tax income of $620,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual and infrequent gain $200,000 Loss from discontinued operations 250 The company's income tax rate is 40%. In its 2011 income statement, Jacobsen would report income from continuing operations of A. $312,000. B. $372,000. C. $620,000. D. $492,000. 34. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012.In its 2011 year-end balance sheet, Reliable would report installment receivables (net) of A. B. C. D. $20,000. $0. $4,000. $15,000. 35. Misty Company reported the following before-tax items during the current year: Sales $600 Operating expenses 250 Restructuring charges 20 Extraordinary loss 50 Misty's effective tax rate is 40%. What would be Misty's net income for the current year? A. B. C. D. $168 $198 $148 $112 36. Quaker State Inc. offers a new employee a lump sum signing bonus at the date of employment. Alternatively, the employee can take $8,000 at the date of employment plus $20,000 at the end of each of his first three years of service. Assuming the employee's time value of money is 10% annually, what lump sum at employment date would make him indifferent between the two options? A. B. C. D. $8,000 $23,026 $57,737 $62,711 37. Koko Company pays $10 million at the beginning of each year for 10 years to Mocha Inc. for a building with a fair value of $75 million. What interest rate is Mocha earning on financing this land sale? A. B. C. D. Between 13% and 14% Between 5.5% and 6% Between 7% and 8% The answer can't be determined from the given information. 38. Fenland Co. plans to retire $100 million in bonds in five years, so it wishes to create a fund by making equal investments at the beginning of each year during that period in an account it expects to earn 8% annually. What amount does Fenland need to invest each year? A. 15,783,077 B. $23,190,400 C. The amount can't be determined from the given information. D. $17,045,650 39. Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed. In its December 31, 2011, balance sheet, Lake would report A. deferred gross profit of $700,000. B. installment receivables (net) of $750,000. C. installment receivables (net) of $900,000. D. deferred gross profit of $1,050,000. 40. In 2011, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): Accounts receivable (from construction progress billings) $37.5 Actual construction costs incurred in 2011 $135 Cash collected on project during 2011 $105 Construction in progress, 12/31/11 $207 Estimated percentage of completion during 2011 60% What are CCC's estimated remaining construction costs on the project at the end of 2011? A. $135 million B. $225 million C. $0 D. $90 million 41. At the end of the next four years, a new machine is expected to generate net cash flows of $8,000, $12,000, $10,000, and $15,000, respectively. What are the (rounded) cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation? A. $41,556 B. $39,982 C. $38,100 D. $32,400 43. On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011. The following additional facts pertain to the transaction: * The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. * The book value of Footwear's assets totaled $48 million on the date of the sale. * Footwear's operating income was a pretax loss of $10 million in 2011. * Foxtrot's income tax rate is 40%. In the 2011 income statement for Foxtrot Co., it would report income from discontinued operations of A. $9.2 million. B. $26 million. C. $13.2 million. D. $22 million. 44. Kunkle Company wishes to earn 20% annually on its investments. If it makes an investment that equals or exceeds that rate, it considers it a success. Assume that it invests $2 million and gets $500,000 in return at the end of each year for x years. What is the minimum value of x for which it will consider the investment a success? Assume that it can't invest for fractional parts of a year. A. 6 years B. 4 years C. 9 years D. 7 years 45. Jacobsen Corporation prepares its financial statement applying International Financial Reporting Standards. During its 2011 fiscal year, the company reported before-tax income of $620,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual and infrequent gain $200,000 Loss from discontinued operations (300,000) The company's income tax rate is 40%. In its 2011 income statement, Jacobsen would report income from continuing operations of A. $492,000. B. $312,000. C. $372,000. D. $620,000. 46. Present and future value tables of $1 at 3% are presented below: Monica wants to sell her share of an investment to Barney for $50,000 in three years. If money is worth 6% compounded semiannually, what would Monica accept today? A. $41,000 B. $8,375 C. $11,941 D. $41,874 47. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales aren't reasonably assured and bad debt losses can't be reasonably predicted. It's unlikely that repossessed merchandise will be in salable condition. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2010. Collections on this sale were $20,000 in 2010, $15,000 in 2011, and $20,000 in 2012. In 2012, Reliable would recognize gross profit of: A. $20,000. B. $6,000. C. $8,000. D. $0. 48. Jack's Fireworks, which was established in 2009, changed its method of accounting for inventories from the average cost method to the first-in, first-out (FIFO) method in 2011. Cost of goods sold for the periods 2009-2011 under FIFO and the average cost method were Year FIFO Average Cost Difference 2009 $120,000 $110,000 $10,000 2010 140,000 128,000 12,000 2011 150,000 144,000 6,000 Jack's Fireworks is subject to a 30% income tax rate. In its income statement for the year ended December 31, 2011, Jack's would report the cumulative effect of a change in accounting principle, net of income taxes, of A. $(15,400). B. $(4,200). C. $19,600. D. $0. 49. Hong Kong Clothiers reported revenue of $5,000,000 for its year ended December 31, 2011. Accounts receivable at December 31, 2010 and 2011, were $320,000 and $355,000, respectively. Using the direct method for reporting cash flows from operating activities, Hong Kong Clothiers would report cash collected from customers of A. $5,045,000. B. $5,000,000. C. $5,035,000. D. $4,965,000. 50. On October 28, 2011, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2011, the end of the company's fiscal year. The division's loss from operations for 2011 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively. What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2011 income statement? A. $2,000,000 loss B. $2,500,000 loss C. $500,000 impairment loss included in continuing operations and a $2,000,000 loss from discontinued operations D. None 51. Cal's Cookies reported 2011 before-tax income before extraordinary items of $152,000 and a before-tax extraordinary loss of $32,000. All tax items are subject to a 30% tax rate. In its 2011 income statement, Cal's would report the following amounts as separate line items for net income and income tax expense: A. $120,000 and $36,000. B. $84,000 and $36,000. C. $120,000 and $45,600. D. $84,000 and $45,600. 52. Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed. In 2012, Lake would recognize realized gross profit of A. $450,000. B. $700,000. C. $310,000. D. $0. 53. Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2010 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2010, $300,000 in 2011, and $300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2011, $400,000 in 2012, and $400,000 in 2013 associated with those sales. In 2013 Lake also repossessed $200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of $75,000 at the time they were repossessed. Total cash collections on installment sales during 2011 would be A. $800,000. B. $700,000. C. $0. D. $300,000
