Homework Help: Intermediate accounting

Posted by cyndi on Saturday, December 11, 2010 at 2:39am.

Rosson Corporation, which began business on January 1, 2008, appropriately uses the installment sales method of accounting for income tax reporting purposes. The following data are available for 2008:

Installment accounts receivable, 12/31/2008 $200,000
Installment sales for 2008 350,000
Gross profit on sales 40%

Under the installment sales method, what would be Rosson’s deferred gross profit at December 31, 2008?
a. $120,000
b. $90,000
c. $80,000
d. $60,000

Intermediate accounting - Anna Camille, Sunday, July 1, 2012 at 3:30am
C. $80,000

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