Intermediate accounting

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

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asked by cyndi
  1. C. $80,000

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