Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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A company sells inventory costing $15,000 to a
customer for $20,000. Because of significant
uncertainties surrounding the transaction, the
installment sales method is viewed as proper. In the
first year, the company collects $5,700. In the
second year, the company collects another $8,000.
What amount of profit should the company
recognize in the second year?
a. $2,000
b. $3,000
c. $4,000
d. $5,000
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Transcribed Image Text:A company sells inventory costing $15,000 to a customer for $20,000. Because of significant uncertainties surrounding the transaction, the installment sales method is viewed as proper. In the first year, the company collects $5,700. In the second year, the company collects another $8,000. What amount of profit should the company recognize in the second year? a. $2,000 b. $3,000 c. $4,000 d. $5,000
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