Refer to LaGrow Developers.Assuming that LaGrow uses the installment sales method,in its December 31,2016 balance sheet,the company would report ________.
A)$3,000,000 net installment account receivable
B)$4,000,000 net installment account receivable
C)$2,600,000 net installment account receivable
D)$5,000,000 net installment account receivable

Question

Quizplus · Accepted Answer

The net installment account receivable is calculated by subtracting the deferred gross profit from the total installment accounts receivable. Assuming the deferred gross profit is $2,000,000, the net installment account receivable would be $3,000,000 ($5,000,000 - $2,000,000).