19. Sound Co. uses the "cost recovery method." The records of Sound Co. show the followinginformation on a sale made on December 31, 20x1:Carrying amount of goods soldConsideration from sale:Cash down payment10% Note payablea. 540,000b. 1,440,000600,0005,400,000The 10% note payable is due in nine annual installments of P600,000 beginning December 31,20x2. The December 31, 20x2 installment was paid as scheduled, together with the interest ofP540,000. What amount of income should Sound Co. recognize in 20x2 from the sale and thefinancing?Sales 20,000 30,000 Cost of Salescollections:From 20x1 salesFrom 20x2 sales4,000,0006,000,00014,000c. 1,960,00020. Cold Breeze Co. uses the "cost recovery method." Relevant information follows:20x120x216,000 18,000 Cash6,00024,000d. 0How much is the gross profit recognized by Cold Breeze in 20x2?a. 4,000b. 6,000c. 10,000d. 0

The cost recovery method of accounting recognizes profit only when the entire cash revenues from a…

Answered: 19. Sound Co. uses the "cost recovery…

19. Sound Co. uses the "cost recovery method." The reco nformation on a sale made on December 31, 20x1: Carrying amount of goods sold Consideration from sale: Cash down payment 600,000 4,000,00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Q5. The following information extracted from the cost records during January 2023 Dates January 1…

A: Lets understand the basics.In first in first out method entity assumes that, goods purchased first…

Q: The inventory of Royal Decking consisted of five products. Information about ending inventory is as…

A: Inventory means the detailed list or stock of items, goods, or materials held by a business or…

Q: Gross profit would be

A: The gross profit is the profit which is calculated by subtracting the cost of goods sold from the…

Q: A company sold goods for $200,000, with terms 2/10, n/30. If the customer pays within the discount…

A: Step 1: Calculation of amount paid by customer The term 2/10, n/30 means, the customer is eligible…

Q: MAKE THE NECCESSARY JOURNAL ENTRIES FOR THE FOLLOWING TRANSACTIONS... 1)Merchandise acquired cost is…

A: Journal: It is the first step of recording financial transactions. It is used to prepare the…

Q: g. Sold 15 of the items purchased (in f) for $120 each and amount in cash. Record the sales…

A: Under perpetual inventory system for sale of inventory there are two separate entries first for…

Q: Average → I If the finance charge is 1.75% of the average daily balance, what is the finance charge…

A: To determine the credit card finance charges, we need to first determine the average daily balance.…

Q: The following transactions are for Sheridan Company. 1. 2. 3. On December 3, Sheridan Company sold…

A: The accounting equation states that assets equal to sum of liabilities and equity. The transactions…

Q: What is the cost of goods sold? O A. $751,700 OB. $364,500 O C. $455,400 O D. $520,600

A: Definition: Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a…

Q: A company purchased $3,400 worth of merchandise. Transportation costs for the buyer were an…

A: INCOME STATEMENTIncome Statement is one of the Important Financial Statement of the Company. Income…

Q: The following relates to a single sale of goods made by Spurs in 2023: Selling price…

A: Freight prepaid in FOB destination means the freight charges are paid by the seller till the goods…

Q: during the current year merchandise is sold for 151,400 cash and 627,700 on account. the cost of…

A: GROSS PROFIT Gross Profit is the Difference between Total Sales & Cost of Goods Sold. Cost of…

Q: On January 13, 20xx, Karl Co. sold on account goods with selling price of P300,000 with terms of…

A: The term FOB shipping point refers to the free on board, which means that the sale completes when…

Q: Use the following to answer questions 30 – 35 Find the missing amounts: Case 1 Case 2 Case 3 Net…

A: Ans. 30. $ 362,900 31. $ 24,600 32. $ 444,000 33. $ 89,800 34. $ 1,110,000 35. $ 361, 500

Q: . Compute the commission and net proceeds for the sale on consignment. Gross Sales $42,800…

A: In this question, we are required to determine the commission and the net proceeds.

Q: Inventory records for Marvin Company revealed the following: Cost Mar. 1 Beginning inventory 960…

A: Under FIFO method the oldest products in inventory have been sold first.

Question

19. Sound Co. uses the "cost recovery method." The records of Sound Co. show the following
information on a sale made on December 31, 20x1:
Carrying amount of goods sold
Consideration from sale:
Cash down payment
10% Note payable
a. 540,000
b. 1,440,000
600,000
5,400,000
The 10% note payable is due in nine annual installments of P600,000 beginning December 31,
20x2. The December 31, 20x2 installment was paid as scheduled, together with the interest of
P540,000. What amount of income should Sound Co. recognize in 20x2 from the sale and the
financing?
Sales 20,000 30,000 Cost of Sales
collections:
From 20x1 sales
From 20x2 sales
4,000,000
6,000,000
14,000
c. 1,960,000
20. Cold Breeze Co. uses the "cost recovery method." Relevant information follows:
20x1
20x2
16,000 18,000 Cash
6,000
24,000
d. 0
How much is the gross profit recognized by Cold Breeze in 20x2?
a. 4,000
b. 6,000
c. 10,000
d. 0

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Working notes for the calculation of the income and gross profit

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

20 A company purchased $3,500 of merchandise on July 5 with terms 1/10, n30. On July 7, it returned $700 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals 2004358 Multiple Choice O O O $2,800 $700 1337) Help Save & Exit $1000 Submit
nku.3
the xyz company completed the following perpetual inventery transactions. may 1 begnining inventery 20units @$ 61each may 11 purchase 6 units @ $ 76 each may 23 sale 16 units @ $ 89 each may 26 purchase 14 units @ $ 86 each may 29 sale 17 units @ $ 89 each. requirements: 1. calculate cost of goods sold,cost of ending inventery , and gross proift using LIFO. 2. during of rising prices, which method (FIFO-LIFO-AVCO) result in highest gross profit . why. 3.which method would be more withhe maching principle .why
1. Compute the missing term. Dollar Markup Cost $427.38 a. $216.41 dollar markup b. $361.41 dollar markup c. $261.41 dollar markup d. $1,116.17 dollar markup Selling Price $688.79
Please do not give solution in image format thanku
Question 28 Use the following information to calculate figures in the table below. Manufacturer: S 60 net selling price. Marks up (Wholesaler: $ 20, Retailer: $ 40) Applicable VAT: 30% Calculation Manufacturer Wholesaler Retailer Customer Net VAT paid by the Manufacturer is: Net cost of sales Mark up Net selling price S 60 S 80 $ 120 VAT chargeable (309%) Gross selling price Accounting for VAT Due to Customs and Excise Recoverable from Customs and Excise subtract) Net VAT Paid by
The following relates to a single sale of goods made by Spurs in 2023: Selling price P500,000Freight costs 5,000Terms 3/15, n/30Shipping Date December 28, 2023Date goods received by the customer January 3, 2024Date payment is received by Spurs January 5, 2024 Question:10. If the term is FOB shipping point, freight collect, how much net cash did Spurs receive on January 5, 2024? a. P480,000b. P485,000c. P490,000d. P495,000
Financial metricsfor crystal GlobeTravel include a total asset turnoverof 1,25 and a return equity of14,30 %, and a debit ratio of 15 % with total asset amounting to R3588 as per the statementof financial position, and considering the financing structure comprising both debt and equity,what is the net profit margin of the company?