Shoreline sells a piece of equipment to a corporate customer for $500,000. The cost of the equipment to Shoreline is $375,000. The terms of the sale call for the customer to make equal annual payments over the next three years, with the first payment due 1 year from now. APR is 9%. Variable consideration is already taken into account. Use the following tables to help you amortize and determine revenue and interest on the contract. Under the Installment method, how much gross profit will Shoreline recognize in Year 1? (to the nearest dollar)
Shoreline sells a piece of equipment to a corporate customer for $500,000. The cost of the equipment to Shoreline is $375,000. The terms of the sale call for the customer to make equal annual payments over the next three years, with the first payment due 1 year from now. APR is 9%. Variable consideration is already taken into account. Use the following tables to help you amortize and determine revenue and interest on the contract. Under the Installment method, how much gross profit will Shoreline recognize in Year 1? (to the nearest dollar)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Shoreline sells a piece of equipment to a corporate customer for $500,000. The cost of the equipment to Shoreline is
$375,000. The terms of the sale call for the customer to make equal annual payments over the next three years, with the first
payment due 1 year from now. APR is 9%. Variable consideration is already taken into account. Use the following tables to
help you amortize and determine revenue and interest on the contract.
Under the Installment method, how much gross profit will Shoreline recognize in Year 1? (to the nearest dollar)
$0
$45,000
O $38,131
$97,774
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