Kerry corp purchased a used bottling machine from bobs, Ask an Expert

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Kerry Corp purchased a used bottling machine from Bob's Bottling Inc. on Jan 1, 2012 for $450000. Bob accounted for the sale correctly under the installment sales method. It had a book value of $225000. Kerry paid with $75000 cash and a note for $375000 with an annual interest of 10%. Kerry agreed to make equal annual payments of $125000. Kerry Corp made their first payment on Jan 1, 2013 of $162500 which included interest of $37500 to date of payment.

As of Dec 31, 2013 Bob has deferred gross profit of?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9800704

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