Dolce Co., which began operations on January 1, 2005, appropriately uses the installment method of accounting to record revenues. The following information is available for the years ended December 31, 2005 and 2006:
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2005 |
2006 |
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|
Sales |
$1,000,000 |
$2,000,000 |
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Gross profit realized on sales made in: |
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|
2005 |
150,000 |
90,000 |
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|
2006 |
— |
200,000 |
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Gross profit percentages |
30 |
% |
40 |
% |
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What amount of installment accounts receivable should Dolce report in its December 31, 2006 balance sheet?
- $1,225,000
- $1,300,000
- $1,700,000
- $1,775,000