Luge Co., which began operations onJanuary 2, 2009, appropriately uses theinstallment method of accounting. Thefollowing information is available for 2009:Installment accounts receivable December31, 2009 -- 800,000 ; Deferred gross profit,Dec. 31 (before recognition of realized grossprofit for 2009) -- 560,000 ; Gross profit onsales -- 40%.For the year ended December 31, 2009, cashcollections and realized gross profit on salesshould be

Gross profit is the excess of sales over variable cost. Gross profit ratio is the ratio of gross…

Answered: For the year ended December 31, 2009,…

Business

Accounting

For the year ended December 31, 2009, cash collections and realized gross profit on sales should be

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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Question

Luge Co., which began operations on
January 2, 2009, appropriately uses the
installment method of accounting. The
following information is available for 2009:
Installment accounts receivable December
31, 2009 -- 800,000 ; Deferred gross profit,
Dec. 31 (before recognition of realized gross
profit for 2009) -- 560,000 ; Gross profit on
sales -- 40%.
For the year ended December 31, 2009, cash
collections and realized gross profit on sales
should be

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