KINDLY SHOW THE SOLUTIONS

Cost recovery 19. Sound Co. uses the "cost recovery method." The records of Sound Co. show the following information on a sale made on December 31, 20x1: Carrying amount of goods sold 4,000,000 Consideration from sale: Cash down payment 600,000 10% Note payable 5,400,000 6,000,000 The 10% note payable is due in nine annual installments of P600,000 beginning December 31, 20x2. The December 31, 20x2 installment was paid as scheduled, together with the interest of P540,000. What amount of income should Sound Co. recognize in 20x2 from the sale and the financing? 20. Cold Breeze Co. uses the "cost recovery method." Relevant information follows: 20x1 20x2 Sales 20,000 30,000 Cost of Sales 16,000 18,000 Cash collections: From 20x1 sales 14,000 6,000 From 20x2 sales 24,000 How much is the gross profit recognized by Cold Breeze in 20x2