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Ford Appliance Center Records Revenue on the Installment Sales Method

question 113

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Ford Appliance Center records revenue on the installment sales method. The following information is available for the first two years of business.
 Year 1 Year 2 Sales $200,000$250,000 Cost of goods sold 140,000162,500 Cash collections:  Year 1 sales 100,00080,000 Year 2 sales 130,000\begin{array}{lrr}&\text { Year } 1&\text { Year } 2\\\text { Sales } & \$ \overline{200,000} & \$ 2 \overline{50,000} \\\text { Cost of goods sold } & 140,000 & 162,500 \\\text { Cash collections: } & & \\\quad \text { Year 1 sales } & 100,000 & 80,000 \\\quad \text { Year 2 sales } & & 130,000\end{array}
-Assume that Ford Appliance Center reports installment sales in accordance with IFRS rules.How much realized gross profit on installment sales will Ford recognize in Year 1?


Definitions:

Product Benefits

The advantages or positive outcomes that consumers receive from using a product, which can be functional, emotional, or social.

Advertisement

A public promotion of some product or service aimed at attracting interest, engagement, or sales.

Purchase Situation Involvement

The degree of personal relevance and interest that a consumer perceives in a buying situation, influencing their decision-making process.

Product Involvement

The degree of interest and importance that consumers attach to a product, affecting their purchasing decisions.

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