On November 1, 2016, SJLL sold a parcel of land for $6,000,000. They had originally paid $3,600,000 for the land. The terms of the sale called for a $1,000,000 down payment, and the balance in two equal installments payable on November 1, 2017 and November 15, 2018. Disregard interest charges. SJLL has a December 31 year-end.
Work Must Be Shown:
Assuming that SJLL uses the installment sales method, the company would recognize gross profit in 2016 of.
A) $1,000,000
B) $0
C) $600,000
D) $400,000
Assuming that SJLL uses the installment sales method, the company would recognize gross profit in 2017 of.
A) $2,500,000
B) $1,500,000
C) $1,000,000
D) $0