On December 15, 2013, Ahmad Sales Co. sold a tract of land that cost $3,600,000...
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On December 15, 2013, Ahmad Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Terms called for a down payment of $500,000 with the balance in two equal annual installments payable on December 15, 2014, and December 15, 2015. Due to the significant uncertainty in collectibility, Ahmad appropriately uses the IFRS method for significant uncertainty to account for this transaction. Ignore interest charges. Ahmad has a December 31 year-end. In 2013, Ahmad would recognize realized gross profit / (loss) of: A. $500,000. B. $0. C. $900,000. D. $(3,100,000).
On December 15, 2013, Ahmad Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Terms called for a down payment of $500,000 with the balance in two equal annual installments payable on December 15, 2014, and December 15, 2015. Due to the significant uncertainty in collectibility, Ahmad appropriately uses the IFRS method for significant uncertainty to account for this transaction. Ignore interest charges. Ahmad has a December 31 year-end.
In 2013, Ahmad would recognize realized gross profit / (loss) of:
A.
$500,000.
B.
$0.
C.
$900,000.
D.
$(3,100,000).
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