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    Computing Installment Method Taxable Income

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    Mr. Zimmerman sold assets on an installment plan. Please determine Mr. Zimmerman's gross income for 2010 based upon the following information:

    Year Installment Sales Gross Profit 2010 Collections
    2008 $200,000 $50,000 $25,000
    2009 $300,000 $81,000 $80,000
    2010 $400,000 $96,000 $125,000

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    Solution Preview

    Year Install Sales Gross Profit 2010 Collections Gross Profit % Taxable Income
    2008 $200,000 $50,000 $25,000 ...

    Solution Summary

    This solution illustrates how to compute taxable income using the installment method.

    $2.19

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