Mary is a dealer in real properties. Mary requires 20% down payment, and the balance is payable over 36 monthly installments starting on the last day of the month following the month of sale. Mary sold properties in 2015 and 2016 with terms as follows:
- House and lot No. 1 was sold for P1,350,000 on November 11, 2015- House and lot No. 2 was sold for P1,800,000 on July 5, 2016
Both properties were sold at a gross profit rate of 40% based on the sellig price
Compute Mary's geoss income subject to income tax in 2015 and 2016 respectively.
A. P120,000;P720,000
B. P540,000;P864,000
C. P540,000;P720,000
D. P120,000;P864,000
Answer: D. P120,000;P864,000