lowa Development ()) mae the fotlowing land sales and had the folorning ca colle
ID: 2508202 • Letter: L
Question
lowa Development ()) mae the fotlowing land sales and had the folorning ca collectons 2012 Sold Altoona land for $2.000000 that cost 1 1 200,00n The land ngreement required payments of $1,000,000 within one week of occupancy of the land, and the $1,000.00?? 2013 Required: a-Prepare journal entries to record the sale, cash collections, and recognition uf grow profit in 2012 and 2013 using the installment sales method under U.S GAAPiDeferred gross profit method) b- Repeat the requirement1 applying the IFRS method for significant uncertainty in collectabilityExplanation / Answer
2012
(a) Customer A/c dr 2000000
to Land 1200000
to Profit Accrued 800000
(b) Profit Accrued a/c dr 400000 [GP = (800000/2000000)*100 = 40%, (10 lac*40%
to Profit on sale of Land 400000 = 400000]
(c) Bank A/c Dr 1000000
to Customer a/c 1000000
2013
(a) Profit Accrued 400000
to Profit on sale of Land 400000
(b) Bank A/c Dr 1000000
to Customer a/c 1000000
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