Donna purchased investment land on January 1, Year 3, for $150,000. On January 1, Year 5, she sold the land for $40,000 cash down-payment plus the buyer signed a note for $300,000 to be paid evenly over the next 3 years, beginning January 1, Year 6. The buyer assumed Donna's $70,000 mortgage on the land. Donna also paid selling expenses of $22,000. For purposes of the installment sales method, what is the gross profit percentage on the sale? 70% 58% 61% 79%

Donna purchased investment land on January 1, Year 3, for $150,000. On January 1, Year 5, she sold the land for $40,000 cash down-payment plus the buyer signed a note for $300,000 to be paid evenly over the next 3 years, beginning January 1, Year 6. The buyer assumed Donna's $70,000 mortgage on the land. Donna also paid selling expenses of $22,000. For purposes of the installment sales method, what is the gross profit percentage on the sale? 70% 58% 61% 79%

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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