You sell a machine for $600,000. You allow the client to pay 1/3 at the time of the sale and 1/3 at the end of year one and 1/3 at the end of year two. The company earns 10% on assets. What value will you record the sale at?
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Sales Price:
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$ 600,000.00
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Down Payment:
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$ 200,000.00
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Outstanding Balance at Start of Year 1:
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$ 400,000.00
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Outstanding Balance at Start of Year 2:
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$ 200,000.00
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0 interest earned Down Payment
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10% Interest Earned on the remaining $400,000 for 1 Year
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$40,000
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10% Interest Earned on the remaining $200,000 for 1 Year
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$20,000
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