Sutton Company sells plasma-screen televisions on an installment basis and appropriately uses the installment-sales method of accounting. A customer with an account balance of $2,400 refuses to make any more payments and the merchandise is repossessed. The gross profit rate on the original sale is 40%. Sutton estimates that the television can be sold as is for $750, or for $900 if $60 is spent to refurbish it. The loss on repossession is
A) $1,650.
B) $960.
C) $ 690.
D) $ 600.

Question

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The Answer of Sutton Company sells plasma-screen televisions on an installment basis and appropriately uses the installment-sales method of accounting. A customer with an account balance of $2,400 refuses to make any more payments and the merchandise is repossessed. The gross profit rate on the original sale is 40%. Sutton estimates that the television can be sold as is for $750, or for $900 if $60 is spent to refurbish it. The loss on repossession is
A) $1,650.
B) $960.
C) $ 690.
D) $ 600.

Sutton Company Sells Plasma-Screen Televisions on an Installment Basis and Appropriately