On November 15, 2016, LaGrow Developers Sold a Parcel of Land

question 69

Multiple Choice

On November 15, 2016, LaGrow Developers sold a parcel of land for $9,000,000. They had originally paid $3,000,000 for the land. The terms of the sale called for a $2,000,000 down payment, and the balance in two equal installments payable on November 15, 2017 and November 15, 2018. Disregard interest charges. LaGrow has a December 31 year-end. Refer to LaGrow Developers. Assuming that LaGrow uses the installment sales method, in its December 31, 2017 balance sheet, the company would report ________. (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

• A) $3,000,000 net installment accounts receivable
• B) $1,166,667 net installment accounts receivable
• C) $3,500,000 net installment accounts receivable
• D) $7,000,000 net installment accounts receivable

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Definitions:

Price Discrimination

An approach where the same goods or services, either identical or very similar, are priced differently by the same seller in distinct markets.

Inelastic Demand

A situation where the demand for a good or service changes little when its price changes, indicating consumers' lack of sensitivity to price adjustments.

Price Discrimination

Price discrimination involves selling the same product or service at different prices to different groups of consumers, often based on factors like age, location, or purchase quantity.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, representing their economic benefit.