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 collections:                 - 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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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 collections:               

 - 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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