Luge Co., which began operations on January 2, year 1, appropriately uses the installment sales method of accounting. The following information is available for year 2:
Installment accounts receivable, December 31, year 2 $800,000 Deferred gross profit, December 31, year 2 (before recognition of realized gross profit for year 2) 560,000 Gross profit on sales 40% For the year ended December 31, year 2, cash collections and realized gross profit on sales should be
Cash collections Realized gross profit a. $400,000 $320,000 b. $400,000 $240,000 c. $600,000 $320,000 d. $600,000 $240,000 57. Dolce Co., which began operations on January 1, year 1, appropriately uses the installment method of accounting to record revenues. The following information is available for the years ended December 31, year 1 and year 2:
Year 1 Year 2 Sales $1,000,000 $2,000,000 Gross profit realized on sales made in: Year 1 150,000 90,000 Year 2 -- 200,000 Gross profit percentages 30% 40% What amount of installment accounts receivable should Dolce report in its December 31, year 2 balance sheet?