Refer to LaGrow Developers.Assuming that LaGrow uses the installment sales method,the company would recognize gross profit in 2016 of ________.
A)$0
B)$400,000
C)$600,000
D)$1,000,000

Question

Quizplus · Accepted Answer

Under the installment sales method, gross profit is recognized in proportion to the cash collected. If LaGrow Developers collected $1,000,000 in 2016 and the gross profit percentage is 40%, then the recognized gross profit would be $400,000 (40% of $1,000,000).