Ford Appliance Center Records Revenue on the Installment Sales Method

question 113

Multiple Choice

Ford Appliance Center records revenue on the installment sales method. The following information is available for the first two years of business.
$\begin{array}{lrr}&\text { Year } 1&\text { Year } 2\\\text { Sales } & \$ \overline{200,000} & \$ 2 \overline{50,000} \\\text { Cost of goods sold } & 140,000 & 162,500 \\\text { Cash collections: } & & \\\quad \text { Year 1 sales } & 100,000 & 80,000 \\\quad \text { Year 2 sales } & & 130,000\end{array}$
-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?

• A)$0
• B)$30,000
• C)$60,000
• D)$100,000

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