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2001. How much must be deferred gross profit at the endof 1999 under the installment method of revenue recognition? *

2001. How much must be deferred gross profit at the endof 1999 under the installment method of revenue recognition? *

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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NO.25

25. On January 1, 1999, Tom Bravo sells 20 acres of farmland for P6,000,000 taking inexchange a 10% interest bearing note. Tom Bravo purchased the farmland in 1984 at acost of P5,000,000. The note will be paid in three installments of P2,412,690 eachDecember 31,1999, 2000, and 2001. How much must be deferred gross profit at the endof 1999 under the installment method of revenue recognition? * A. 1,000,000 B. 697,885 O C. 637,462 O D. 597,885
Transcribed Image Text:25. On January 1, 1999, Tom Bravo sells 20 acres of farmland for P6,000,000 taking inexchange a 10% interest bearing note. Tom Bravo purchased the farmland in 1984 at acost of P5,000,000. The note will be paid in three installments of P2,412,690 eachDecember 31,1999, 2000, and 2001. How much must be deferred gross profit at the endof 1999 under the installment method of revenue recognition? * A. 1,000,000 B. 697,885 O C. 637,462 O D. 597,885
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