Tuesday
July 29, 2014

Homework Help: accounting-fory

Posted by alex on Monday, March 17, 2014 at 11:10pm.

On January 1, 2012, Bartell Company sold its idle plant facility to Cooper Inc. for $1,050000. On this date, the plant had a depreciated cost of $735,000. Cooper paid $150,000 cash on January 1, 2012, and signed a $900,000 note bearing interest at 10%. The note was payable in three annual installments of $300,000 beginning January 1, 2013. Bartell appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 1, 2013, of $390,000, which included interest of $90,000 to date of payment. At December 31, 2013, Bartell had deferred gross profit of:

I know the answer is 180,000. At first I was under the impression it was because the company was making 90,000 interest gross profit time 2 to make it equal 180,000, but that does not seem correct. Any guidance would be greatly appreciated.

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