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On August 1, Year 1, Anderson Company sells inventory costing $331,200 for $517,500. The sales...

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Accounting

On August 1, Year 1, Anderson Company sells inventory costing $331,200 for $517,500. The sales agreement states that the buyer will pay $67,500 down and 20 equal monthly installment payments, with the first payment beginning on September 1, Year 1. Required: Compute the amount of gross profit to be recognized for each of the three years. Note: Assume that since collection is not assured (significant uncertainty), the company has decided to use the installment sales method of recognizing revenue.

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