Q1) On January 1, 2007, Barkly Company sold property for $200,000. Note will be gathered as follows: $100,000 in 2007, $60,000 in 2008, and $40,000 in 2009. Property had cost Barkly $150,000, when it was bought in 2005.
a. Calculate amount of gross profit realized each year, supposing Barkly uses cost-recovery method.
b. Calculate amount of gross profit realized each year, supposing Barkly uses installment-sales method.