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?

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

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