Lake power sports sells jet skis and other powered recreational equipment/ customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. because lake has little information about the ability to collect these receivables, it uses cost recovery method to recognize revenue on these installment sales. in 2015, lake began operations and sold jet skis with a total price of $1,020,000 that cost lake $510,000. lake collected $340,000 in 2015, $340,000 in 2016, and $340,000 in 2017 associated with those sales. in 2016, lake sold jet skis with a total price of $1,920,000 that cost lake $1,152,000. lake collected $640,000 in 2016, $512,000 in 2017, and $512,000 in 2018associated with those sales. in 2018, lake also repossessed $256,000 of jet skis that were sold in 2016. those jet skis has a fair value of $96,000 at the time they were repossessed. in 2017, lake would recognize realized gross profit of: a. $0b. $340,000c. $852,000d. $650,000

Which of the following statements accurately describes how costs and benefits are calculated?

Presented below is a list of possible transactions. analyze the effect of the 18 transactions on the financial statement categories indicated. transactions assets liabilities owners’ equity net income 1. purchased inventory for $80,000 on account (assume perpetual system is used). 2. issued an $80,000 note payable in payment on account (see item 1 above). 3. recorded accrued interest on the note from item 2 above. 4. borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. recognized 4 months’ interest expense on the note from item 4 above. 6. recorded cash sales of $75,260, which includes 6% sales tax. 7. recorded wage expense of $35,000. the cash paid was $25,000; the difference was due to various amounts withheld. 8. recorded employer’s payroll taxes. 9. accrued accumulated vacation pay. 10. recorded an asset retirement obligation. 11. recorded bonuses due to employees. 12. recorded a contingent loss on a lawsuit that the company will probably lose. 13. accrued warranty expense (assume expense warranty approach). 14. paid warranty costs that were accrued in item 13 above. 15. recorded sales of product and related service-type warranties. 16. paid warranty costs under contracts from item 15 above. 17. recognized warranty revenue (see item 15 above). 18. recorded estimated liability for premium claims outstanding.

Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to: