Question
On December 15, 2018, Rigsby Sales Co. sold a tract of land that cost $3,700,000 for $5,000,000. Rigsby appropriately uses the installment sales method of
On December 15, 2018, Rigsby Sales Co. sold a tract of land that cost $3,700,000 for $5,000,000. Rigsby appropriately uses the installment sales method of accounting for this transaction. Terms called for a down payment of $420,000 with the balance in two equal annual installments payable on December 15, 2019, and December 15, 2020. Ignore interest charges. Rigsby has a December 31 year-end.
In its December 31, 2018, balance sheet, Rigsby would report:
Multiple Choice
Installment receivables (net) of $3,389,200.
Deferred gross profit of $109,200.
Realized gross profit of $109,200.
Installment receivables (net) of $4,580,000.
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