Aberdeen Company sold an asset for $450,000 during 2014, its first year of operations. The asset cost Aberdeen $300,000, and the sale was recorded using the cost recovery method. Cash collections were as follows: $100,000 in 2014; $200,000 in 2015; and $150,000 in 2016.
Required:
a.Prepare all journal entries connected with the sale for all three years.
b.Show how the net amount of the accounts receivable would be disclosed on the 2015 balance sheet.

Question

Aberdeen Company sold an asset for $450,000 during 2014, its first year of operations. The asset cost Aberdeen $300,000, and the sale was recorded using the cost recovery method. Cash collections were as follows: $100,000 in 2014; $200,000 in 2015; and $150,000 in 2016.
Required: 
a.Prepare all journal entries connected with the sale for all three years.
b.Show how the net amount of the accounts receivable would be disclosed on the 2015 balance sheet.

Quizplus · Accepted Answer

The Answer of Aberdeen Company sold an asset for $450,000 during 2014, its first year of operations. The asset cost Aberdeen $300,000, and the sale was recorded using the cost recovery method. Cash collections were as follows: $100,000 in 2014; $200,000 in 2015; and $150,000 in 2016.
Required: 
a.Prepare all journal entries connected with the sale for all three years.
b.Show how the net amount of the accounts receivable would be disclosed on the 2015 balance sheet.

Aberdeen Company Sold an Asset for $450,000 During 2014, Its