On January 2, 2009, Colt Co. sold land thatcost P600,000 for P800,000, receiving anote bearing interest at 10%. The note willI bepaid in three annual instalments of P321,700starting on December 31, 2009. Becausecollection of the note is very uncertain, Coltwill use the cost recovery method. Howmuch revenue from this sale should Coltrecognize in 2009?

Under the cost recovery method profit will be recognise only when the full cost of good sold is…

Answered: On January 2, 2009, Colt Co. sc cost…

Business

Accounting

On January 2, 2009, Colt Co. sc cost P600,000 for P800,000, re- note bearing interest at 10%. Th

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

On January 2, 2009, Colt Co. sold land that
cost P600,000 for P800,000, receiving a
note bearing interest at 10%. The note willI be
paid in three annual instalments of P321,700
starting on December 31, 2009. Because
collection of the note is very uncertain, Colt
will use the cost recovery method. How
much revenue from this sale should Colt
recognize in 2009?

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