NO.25 25. On January 1, 1999, Tom Bravo sells 20 acres of farmland forP6,000,000 taking inexchange a 10% interest bearing note. Tom Bravopurchased the farmland in 1984 at acost of P5,000,000. The note will bepaid in three installments of P2,412,690 eachDecember 31,1999, 2000, and2001. How much must be deferred gross profit at the endof 1999 under theinstallment method of revenue recognition? *A. 1,000,000B. 697,885O C. 637,462O D. 597,885

The installment method of revenue recognition allows businesses to recognize revenue from the sale…

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

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 18MCQ: Pat sells land for $25,000 cash and a $75,000 5-year note. If her basis in the property is $30,000...

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Question

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

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