Question
Lake Power Sports sells jet skis and other powered equipment. Customers pay 1/3 of the sales price of a jet ski when they finically purchase
Lake Power Sports sells jet skis and other powered equipment. Customers pay 1/3 of the sales price of a jet ski when they finically purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has lisle information about collectability of these receivables, they use the instalment method for revenue recognin. In 2010 Lake began opera Cons 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.
Required:
What are the total cash collection on instalment sales during 2011?
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