Parnell Industries Parnell Industries Sold a Copy Machine to Ranger Inc. on Inc

Multiple Choice

Parnell Industries
Parnell Industries sold a copy machine to Ranger Inc. on January 1, 2012. The sale price of the machine was $4,000,000 and the machine cost $3,200,000 for Parnell to manufacture. Ranger will make four payments at the end of each year, beginning with 2012, of $1,261,883 each. The four payments of $1,261,883 when discounted at 10% have a present value of $4,000,000. An amortization table appears below:

-If Parnell Industries is certain that it will collect all four payments from Ranger Inc.what amount of gross profit should Parnell recognize in 2012 from the sale?

A) $0
B) $861,883
C) $172,377
D) $800,000