Question
On November 1, 2016, SJLL sold a parcel of land for $6,000,000. They had originally paid $3,600,000 for the land. The terms of the sale
On November 1, 2016, SJLL sold a parcel of land for $6,000,000. They had originally paid $3,600,000 for the land. The terms of the sale called for a $1,000,000 down payment, and the balance in two equal installments payable on November 1, 2017 and November 15, 2018. Disregard interest charges. SJLL has a December 31 year-end.
Work Must Be Shown:
Assuming that SJLL uses the installment sales method, the company would recognize gross profit in 2016 of ________.
A)$1,000,000
B)$0
C)$600,000
D)$400,000
Assuming that SJLL uses the installment sales method, the company would recognize gross profit in 2017 of ________.
A)$2,500,000
B)$1,500,000
C)$1,000,000
D)$0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started