Tappan Industrial sells machinery on the installment plan. On September 1, 2011, Tappan entered into an installment sale contract with Western Productions for a six-year period. Equal annual payments under the installment sale are $187,500 and are due on August 31 of each year beginning in 2012.
Additional information:

Compute the income or loss before taxes that Tappan should record for the year ended December 31, 2011, as a result of the above transaction, assuming that circumstances are such that the collection of the installments due under the contract

Question

Tappan Industrial sells machinery on the installment plan. On September 1, 2011, Tappan entered into an installment sale contract with Western Productions for a six-year period. Equal annual payments under the installment sale are $187,500 and are due on August 31 of each year beginning in 2012.
Additional information:
  
Compute the income or loss before taxes that Tappan should record for the year ended December 31, 2011, as a result of the above transaction, assuming that circumstances are such that the collection of the installments due under the contract

Quizplus · Accepted Answer

The Answer of Tappan Industrial sells machinery on the installment plan. On September 1, 2011, Tappan entered into an installment sale contract with Western Productions for a six-year period. Equal annual payments under the installment sale are $187,500 and are due on August 31 of each year beginning in 2012.
Additional information:
  
Compute the income or loss before taxes that Tappan should record for the year ended December 31, 2011, as a result of the above transaction, assuming that circumstances are such that the collection of the installments due under the contract

Tappan Industrial Sells Machinery on the Installment Plan