Lamberson Company has used the installment method of accounting since it began operations at the beginning of 2008. The following information pertains to its operations for 2008:
The amount to be reported on the December 31, 2008 balance sheet as Deferred Gross Profit should be
A) $168,000.
B) $252,000.
C) $336,000.
D) $840,000.

Question

Lamberson Company has used the installment method of accounting since it began operations at the beginning of 2008. The following information pertains to its operations for 2008:
 The amount to be reported on the December 31, 2008 balance sheet as Deferred Gross Profit should be
A) $168,000. 
B) $252,000. 
C) $336,000. 
D) $840,000.

Quizplus · Accepted Answer

[($1,400,000 - $980,000) ÷ $1,400,000] × $840,000 = $252,000

Lamberson Company Has Used the Installment Method of Accounting Since