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On December 15, 2011, Rigsby Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the installment sale method of accounting for this transaction. Terms called for a down payment of $500,000 with the balance in two equal annual installments payable on December 15, 2012, and December 15, 2013. Ignore interest charges. Rigsby has a December 31 year-end.

In 2012, Rigsby would recognize realized gross profit of:

a. $0.
b. $450,000.
c. $300,000.
d. $400,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
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