On January 2, 2009, Blake Co. sold a used machine to Cooper Inc. for P900,000 resulting to a gain of P270,000. On that date, Cooper paid P150,000 cash and signed a P750,000 note bearing interest at 10%. The note was payable in three annual installments of P250,000 beginning January 2, 2010. Blake appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 2, 2010, of P325,000, which included accrued interest of P75,000. What amount of deferred gross profit should Blake report at December 31, 2010?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
On January 2, 2009, Blake Co. sold a used
machine to Cooper Inc. for P900,000
resulting to a gain of P270,000. On that date,
Cooper paid P150,000 cash and signed a
P750,000 note bearing interest at 10%. The
note was payable in three annual
installments of P250,000 beginning January
2, 2010. Blake appropriately accounted for
the sale under the installment method.
Cooper made a timely payment of the first
installment on January 2, 2010, of P325,000,
which included accrued interest of P75,000.
What amount of deferred gross profit should
Blake report at December 31, 2010?
Transcribed Image Text:On January 2, 2009, Blake Co. sold a used machine to Cooper Inc. for P900,000 resulting to a gain of P270,000. On that date, Cooper paid P150,000 cash and signed a P750,000 note bearing interest at 10%. The note was payable in three annual installments of P250,000 beginning January 2, 2010. Blake appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 2, 2010, of P325,000, which included accrued interest of P75,000. What amount of deferred gross profit should Blake report at December 31, 2010?
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education