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    Installment-Sales Method and Cost-Recovery Method

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    On January 1, 2007, Barkly Company
    sold property for $200,000. The note will be collected as follows: $100,000 in 2007, $60,000 in 2008, and
    $40,000 in 2009. The property had cost Barkly $150,000 when it was purchased in 2005.
    (a) Compute the amount of gross profit realized each year, assuming Barkly uses the cost-recovery
    (b) Compute the amount

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    Solution Preview

    Sales 200000
    Cost 150000
    Gross profit 50000
    Gross profit ...

    Solution Summary

    The expert examines installment sales method and the cost-recovery methods.