Answer:
1) In 2010, Lake would recognize realized gross profit of:______.
a) $0.
Revenue for calculating gross profit is only recognized when the cost of goods sold (COGS) has been fully recovered.
2) In 2012, Lake would recognize a realized gross profit of:_______.
c) $450,000.
gross profit related to 2010 sales = $900,000 - $450,000 (remaining COGS) = $450,000
gross profit related to 2011 sales = $900,000 - $900,000 = $0
3) In 2013, Lake would record a lost on repossessions of:______.
c) $200,000.
4) In its December 31, 2011, balance sheet, Lake would report:_______.
b) installment receivables (net) of $900,000.
total installments receivables = $300,000 + $1,000,000 = $1,300,000
remaining COGS from 2011 sales = $400,000
installment receivables (net) = $1,300,000 - $400,000 = $900,000
