Question
On March 1, Year 1, Bryant Company sells inventory costing $741,125 for $962,500. The sales agreement states that the buyer will pay $55,000 down and
On March 1, Year 1, Bryant Company sells inventory costing $741,125 for $962,500. The sales agreement states that the buyer will pay $55,000 down and 33 equal monthly installment payments, with the first payment beginning on April 1, Year 1.
Required:
Compute the amount of gross profit to be recognized for each of the three years.
Note: Assume that since collection is not assured (significant uncertainty), the company has decided to use the installment sales method of recognizing revenue.
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
