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On January 1, 2006, Bartell Company sold its idle plant facility to Cooper, Inc., for $1,050,000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 cash on January 1, 2006, and signed a $900,000 note bearing interest at 10%. The note was payable in three annual installments of $300,000 beginning January 1, 2007. Bartell appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 1, 2007 of $390,000, which included interest of $90,000 to date of payment. At December 31, 2007, Bartell has deferred gross profit of: a. $153,000. b. $180,000. c. $225,000. d. $270,000.

On January 1, 2006, Bartell Company sold its idle plant facility to Cooper, Inc., for $1,050,000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 cash on January 1, 2006, and signed a $900,000 note bearing interest at 10%. The note was payable in three annual installments of $300,000 beginning January 1, 2007. Bartell appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 1, 2007 of $390,000, which included interest of $90,000 to date of payment. At December 31, 2007, Bartell has deferred gross profit of: a. $153,000. b. $180,000. c. $225,000. d. $270,000.

FINANCIAL ACCOUNTING
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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On January 1, 2006, Bartell Company sold its idle plant facility to Cooper, Inc., for $1,050,000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 cash on January 1, 2006, and signed a $900,000 note bearing interest at 10%. The note was payable in three annual installments of $300,000 beginning January 1, 2007. Bartell appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 1, 2007 of $390,000, which included interest of $90,000 to date of payment. At December 31, 2007, Bartell has deferred gross profit of: a. $153,000. b. $180,000. c. $225,000. d. $270,000.
Transcribed Image Text:On January 1, 2006, Bartell Company sold its idle plant facility to Cooper, Inc., for $1,050,000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 cash on January 1, 2006, and signed a $900,000 note bearing interest at 10%. The note was payable in three annual installments of $300,000 beginning January 1, 2007. Bartell appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 1, 2007 of $390,000, which included interest of $90,000 to date of payment. At December 31, 2007, Bartell has deferred gross profit of: a. $153,000. b. $180,000. c. $225,000. d. $270,000.
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