Ulrich CoSells an Asset to a Buyer for a Total Sales

question 103

Multiple Choice

Ulrich Co.sells an asset to a buyer for a total sales price of $6,000 with a payment schedule of $2,000 in year 1, $2,000 in year 2, and $2,000 in year 3.The cost of the asset is $5,000.Under the cost-recovery-first method, what amount of net profit is recognized in year 3?

• A)$2,000
• B)$1,000
• C)$666.67
• D)$333.33
• E)$0

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus through conditioning.

Fear of Spiders

Also known as arachnophobia, it is an intense and irrational fear of spiders and other arachnids.