Here's a good example of how you can take short cuts on the exam:
Becker Question CPA-00824
On December 31, Year 1, Mill Co. sold construction equipment to Drew, Inc. for $1,800,000. The equipment had a carrying amount of $1,200,000. Drew paid $300,000 cash on December 31, Year 1 and signed a $1,500,000 note bearing interest at 10% payable in five annual installments of $300,000. Mill appropriately accounts for the sale under the installment method. On December 31, Year 2, Drew paid $300,000 principal and $150,000 interest. For the year ended December 31, Year 2, what total amount of revenue should Mill recognize from the construction equipment sale and financing?
A. $150,000
B. $100,000
C. $250,000 <– correct
D. $120,000
Without calculating a bunch of stuff, you know Mill made at least $150,000 in interest revenue in year 2. But they made more than that because they must have recognized some amount of revenue for the installment sale. C is the only answer greater than $150,000.
.