Harber Co. uses the installment -sales method. When an account had a balance of $8,400, no further collections could be made and the dining room set was repossessed. At that time, it was estimated that the dining room set could be sold for $2,400 as repossessed, or for $3,000 if the company spent $300 reconditioning it. The gross profit rate on this sale was 70%. The gain or loss on repossession was a
A) $5,880 loss.
B) $6,000 loss.
C) $600 gain.
D) $180 gain.

Question

Quizplus · Accepted Answer

$8,400 - $5,880 = $2,520
($3,000 - $300) - $2,520 = $180 gain.

Harber Co Uses the Installment -Sales Method