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Home Surplus, Inc. began operation in May, 2011 by selling exclusively on the installment basis....

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Accounting

Home Surplus, Inc. began operation in May, 2011 by selling exclusively on the installment basis. Using the installment method of income recognition, the company summarized the following data at the end of the first eight-month period: installment sales, P450,000; various expenses, P23,000; accounts receivable, P330,000; and, inventory, P80,000. If the gross margin based on cost is 66-2/3%, the net income was:

a. P25,000

b. P48,000

c. P57,000

d. P80,000

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