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

question 32

Multiple Choice

On November 15, 2016, LaGrow Developers sold a parcel of land for $4,000,000. They had originally paid $3,600,000 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 cost-recovery method, in its December 31, 2016 balance sheet, the company would report ________.

• A) $1,000,000 net installment accounts receivable
• B) $200,000 net installment accounts receivable
• C) $1,600,000 net installment accounts receivable
• D) $2,000,000 net installment accounts receivable

Understand how merchandise returns from customers are recorded in accounting.

Comprehend the components that constitute the cost of merchandise inventory.

Grasp the accounting procedures in a perpetual inventory system, including how merchandise returns to suppliers are handled.

Recognize how credit card sales and associated fees are recorded in retail accounting.

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Definitions:

Dislike

A feeling of disapproval or dissatisfaction towards someone or something.

Heard

The act of perceiving sound by the ear; if you have heard something, you have perceived it through hearing.

Friend

A person with whom one has a bond of mutual affection, typically exclusive of sexual or family relations.

Mentally Ill

Refers to individuals suffering from a wide range of mental health conditions that affect mood, thinking, and behavior.