Demolish Co. uses the “cost recovery method” (traditional accounting based on old US GAAP). The records of Demolish Co. show the following information:   20x1 20x2 sales 10,000 15,000 cost of sales 8,000 9,000 cash collection:     -from 20x1 sales 7,000 3,000 -from 20x2 sales   12,000 How much is the gross profit recognized by Demolish in 20x2

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Demolish Co. uses the “cost recovery method” (traditional accounting based on old US GAAP). The records of Demolish Co. show the following information:

  20x1 20x2
sales 10,000 15,000
cost of sales 8,000 9,000
cash collection:    
-from 20x1 sales 7,000 3,000
-from 20x2 sales   12,000

How much is the gross profit recognized by Demolish in 20x2?

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