Answered: what total amount of revenue (including…

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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On December 31, 2010, Clark Inc. sold construction equipment to Build Company for P3,600,000. The equipment had a cost of P2,400,000. Build Company paid P600,000 cash on December 31, 2010 and signed a P3,000,000 interest bearing note at 10 percent payable in five annual installments of P600,000. Clark Inc. appropriately accounted for the sale under the installment method. On December 31, 2011, Build Company paid P900,000 including interest of P300,000. For the year ended December 31, 2011, what total amount of revenue (including interest) should Clark Inc. recognize from the construction equipment sale and financing?

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