Hartz Co, Which Began Operations on January 1, 2015, Appropriately Uses

question 110

Multiple Choice

Hartz Co., which began operations on January 1, 2015, appropriately uses the installment-sales method of accounting. The following information pertains to Hartz's operations for the year 2015: $\begin{array}{lr}\text { Installment sales } & \$ 2,400,000 \\\text { Regular sales } & 960,000 \\\text { Cost of installment sales } & 1,440,000 \\\text { Cost of regular sales } & 576,000 \\\text { General and administrative expenses } & 192,000 \\\text { Collections on installment sales } & 576,000\end{array}$ The deferred gross profit account in Hartz's December 31, 2015 balance sheet should be

• A) $230,400.
• B) $384,000.
• C) $729,600.
• D) $960,000.

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