On December 15, 2021, Rigsby Sales Co. sold a tract of land that cost $3,300,000...
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Accounting
On December 15, 2021, Rigsby Sales Co. sold a tract of land that cost $3,300,000 for $5,000,000. Rigsby appropriately uses the installment sales method of accounting for this transaction. Terms called for a down payment of $480,000 with the balance in two equal annual installments payable on December 15, 2022, and December 15, 2023. Ignore interest charges. Rigsby has a December 31 year-end. At December 31, 2022, Rigsby would report in its balance sheet:
Multiple Choice
Cost of installment sales $1,491,600.
Deferred gross profit of $768,400.
Realized gross profit of $480,000.
Realized gross profit of $768,400.
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