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

question 102

Multiple Choice

On November 15, 2016, LaGrow Developers sold a parcel of land for $4,500,000. 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 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 cost-recovery method, the company would recognize gross profit in 2018 of ________. (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

• A) $0
• B) $3,500,000
• C) $900,000
• D) $200,000

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Definitions:

Bumper Crop

An unusually large harvest of crops in a particular year.

Fluctuations

Variations or changes in a condition or value over time, often observed in economic indicators, prices, or activity levels.

Agricultural Prices

The prices of commodities produced by the agricultural sector, including crops and livestock, which can fluctuate due to various factors.

Declining Industry

Declining Industry refers to a sector experiencing a long-term drop in demand or output, often due to technological changes, market saturation, or shifts in consumer preferences.