Refer to Thompson Industries. Assume that Thompson Industries uses the cost-recovery method. Prepare all journal entries related to the sale of land, the collection of cash, and the recognition of gross profit
What will be an ideal response?
Answer:
Year 1
Installment A/R
1,200,000
Land
780,000
Deferred Gross Profit
420,000
Cash
300,000
Installment A/R
300,000
Year 2
Cash
300,000
Installment A/R
300,000
Year 3
Cash
300,000
Installment A/R
300,000
Deferred Gross Profit
120,000
Realized Gross Profit
120,000
Year 4
Cash
300,000
Installment A/R
300,000
Deferred Gross Profit
300,000
Realized Gross Profit 300,000
You might also like to view...
Processes such as procurement, managing inventory, and evaluating potential suppliers are a part of ________
A) inbound logistics B) operations C) services D) outbound logistics
If two events A and B are mutually exclusive, what would be the addition rule?
A) P(A ? B) = P(A) + P(B) B) P(A ? B) = P(A) + P(B) C) P(A | B) = P(A) D) P(A | B) = P(A) - P(B)