Aspire Enterprises sells inventory costing $21,000 to a customer for $30,000. Because of significant uncertainties surrounding the transaction, the installment sales method is viewed as proper. In the first year, the company collects $9,600. In the second year, the company collects another $12,000. What amount of profit should the company recognize in the second year? a. $3,360 b. $4,320 c. $3,600 d. $6,120

Aspire Enterprises sells inventory costing $21,000 to a customer for $30,000. Because of significant uncertainties surrounding the transaction, the installment sales method is viewed as proper. In the first year, the company collects $9,600. In the second year, the company collects another $12,000. What amount of profit should the company recognize in the second year? a. $3,360 b. $4,320 c. $3,600 d. $6,120

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were 40,000 with a cost of 30,000. In year 3, installment sales were 50,000 with a cost of 25,000. Collections in year 2 were in the amount of 30,000. Collections in year 3 were 10,000 on the year 2 sales and 30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2? a. 2,500 b. 5,000 c. 7,500 d. 10,000
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