On June 1, 2022, City Car Sales sells a new car costing P4,726,400 for P6,804,000. A used car is accepted as a down payment, P960,000 beings allowed on the trade in. The used can be resold for P1,458,000 after reconditioning cost of P194,400. The company expects to make a 20% gross profit on the sale of used cars, Over the remainder of 2022, another P520,000 was collected on the contract. Expenses incurred related to the sales are P750,000. Calculate the net income for City Car Sales over the transactions mentioned above.
On June 1, 2022, City Car Sales sells a new car costing P4,726,400 for P6,804,000. A used car is accepted as a down payment, P960,000 beings allowed on the trade in. The used can be resold for P1,458,000 after reconditioning cost of P194,400. The company expects to make a 20% gross profit on the sale of used cars, Over the remainder of 2022, another P520,000 was collected on the contract. Expenses incurred related to the sales are P750,000. Calculate the net income for City Car Sales over the transactions mentioned above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 1, 2022, City Car Sales sells a new car costing P4,726,400 for P6,804,000. A used car is accepted as a down payment, P960,000 beings allowed on the trade in. The used can be resold for P1,458,000 after reconditioning cost of P194,400. The company expects to make a 20% gross profit on the sale of used cars, Over the remainder of 2022, another P520,000 was collected on the contract. Expenses incurred related to the sales are P750,000.
Calculate the net income for City Car Sales over the transactions mentioned above.
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