Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 53P
Related questions
Question
Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price.
Compute Merville’s gross income subject to income tax in 2019 and 2020, respectively.
P120,000;P720,000
P540,000;P720,000
P120,000;P846,000
P540,000;P846,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT