Interest earned on down payment, Cost Accounting

You sell a machine for $600,000. You allow the client to pay 1/3 at the time of the sale and 1/3 at the end of year one and 1/3 at the end of year two. The company earns 10% on assets. What value will you record the sale at?

Sales Price:

 $  600,000.00

Down Payment:

 $  200,000.00

Outstanding Balance at Start of Year 1:

 $  400,000.00

Outstanding Balance at Start of Year 2:

 $  200,000.00


0 interest earned Down Payment

10% Interest Earned on the remaining $400,000 for 1 Year


10% Interest Earned on the remaining $200,000 for 1 Year


Posted Date: 3/30/2013 5:23:22 AM | Location : United States

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