ACC410 E18-6 - Gross profit rate: ($250,000 $150,000)...

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EXERCISE 18-16 (a) Computation of gross profit realized—cost-recovery method: Year Cash Received Original Cost Recovered Balance of Unrecovered Cost Gross Profit Realized Beginning balance $150,000 2010 $120,000 $120,000 30,000 $0 2011 90,000 30,000 0 60,000 2012 40,000 0 0 40,000 (b) Computation of gross profit realized—installment-sales method:
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Unformatted text preview: Gross profit rate: ($250,000 $150,000) $250,000 = 40% 2010 Gross profit realized: $120,000 X 40% = $48,000 2011 Gross profit realized: $ 90,000 X 40% = $36,000 2012 Gross profit realized: $ 40,000 X 40% = $16,000 1...
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