Answered: gross income in 2020 using the…

Business

Accounting

gross income in 2020 using the installment method

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

Bronx Corporation, a domestic corporation engaged in merchandising business, sold its parking lot for P3,500,000 payable on installment. The lot was previously acquired for P2,800,000. The buyer was required to make a down payment in the amount of P200,000. The buyer has outstanding unpaid balance of P2,700,000 as of December 31 of the taxable year 2020. Compute the gross income in 2020 using the installment method.

a.P160,000

b.P40,000

c.P120,000

d.Installment method does not apply

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