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The Pulahan, Inc. began operating at the start of the calendar year 2014, uses the installment method of accounting:
Installment sales 400,000Gross margin on cost 66 2/3%Inventory, December 31, 2014 80,000General and admin expenses 40,000Accounts receivable, Dec. 31, 2014 320,000
Problem 1: The balance of the deferred gross profit account at December 31, 2014 should be:
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