Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Compute Merville’s gross income subject to income tax in 2019 and 2020, respectively.
P120,000;P720,000
P540,000;P720,000
P120,000;P846,000
P540,000;P846,000
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