Don't want incorrect solution A company sells inventory costing $17,000 to a customer for$25,000. Because of significant uncertainties surrounding thetransaction, the installment sales method is viewed as proper. In thefirst year, the company collects $8,200. In the second year, thecompany collects another $11,000. What amount of profit should thecompany recognize in the second year?a. $2,210b. $3,520c. $4,340d. $5,050

To determine the profit recognized in the second year using the installment sales method, follow…

Answered: A company sells inventory costing…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 1BCRQ

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Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were 40,000 with a cost of 30,000. In year 3, installment sales were 50,000 with a cost of 25,000. Collections in year 2 were in the amount of 30,000. Collections in year 3 were 10,000 on the year 2 sales and 30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2? a. 2,500 b. 5,000 c. 7,500 d. 10,000
Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
A company sells inventory costing $17,000 to a customer for $25,000. Because of significant uncertainties surrounding the transaction, the installment sales method is viewed as proper. In the first year, the company collects $8,200. In the second year, the company collects another $11,000. What amount of profit should the company recognize in the second year?
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An entity was offering premium as a sales promotion scheme and that during the year it purchased 10,000 premiums for P20 each. Customers need to remit 10 boxes and P5 to redeem one premium. Assume there were no redemptions during the first year of the promotion, which of the following statements would be correct if it uses the revenue approach? a. The entity will report an inventory of premiums at the net cost of P15. Tb. he entity will report an estimated liability equal to the premium expense. c. None of the other choices are correct. Td. he entity will not report any expense since there were no redemption. e. No accounting liability shall be recognized since there were no redemptions.
Please answer requirement a. Thanks.
AB Ltd.'s gross purchases were $8,000, net purchases account for an average 10% discount on all items purchased and 5% of items were returned due to wrong specifications during the year. Also during the year the net sales were $7,805. Required 1: If beginning and ending inventory are zero (Just in time), AB's cost of good solf for the period must have been: $ Required 2: AB's Purchase Return and Allowances for the period must have been: $ Required 3: AB's Purchase Discounts for the period must have been: $ Required 4: AB's Net Puchases for the period must have been: $ Required 5: AB's Gross Profit on Sales in dollars for the period must have been: $
Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000. a. Compute gross profit (using the unadjusted numbers above). b. The company expects future returns and allowances equal to 5% of sales and 5% of cost of sales. 1. Prepare the year-end adjusting entry to record the sales expected to be refunded. 2. Prepare the year-end adjusting entry to record the cost side of sales returns and allowances. 3. Recompute gross profit using the adjusted numbers from parts 1 and 2. c. Is Sales Refund Payable an asset, liability, or equity account? d. Is Inventory Returns Estimated an asset, liability, or equity account?
Freedman Company estimates that sales this year of $12,000 will be returned next year and customers will be granted a full refund. Which of the following journal entries would Freedman Company record as part of its year-end adjustments assuming it uses the perpetual inventory system? a.Debit Estimated Returns Inventory for $12,000 and credit Income Summary for $12,000 b.Debit Sales Returns and Allowances for $12,000 and credit Cost of Goods Sold for $12,000 c.Debit Inventory Short and Over for $12,000 and credit Merchandise Inventory for $12,000 d.Debit Sales Returns and Allowances for $12,000 and credit Customer Refunds Payable for $12,000
or each of the separate revenue contract scenarios 1 through 5, (a) measure the transaction price and (b) determine whether the transaction price is fixed, variable, or some combination of both. 1. Loyola Inc. sells $70,000 of inventory during the year to customers for $140,000. Loyola Inc. accepts returns up to 3 months after the date of purchase. Loyola estimates returns to be 6% of sales. a. Transaction price Answer b. Variable consideration Answer Fixed consideration Answer 2. Nakoma Corp. sells product offering a retroactive volume discount on certain cumulative sales volumes as follows: 0 to 500 units cost $10 each; 501 to 1,000 units cost $9 each; 1,001 units and beyond cost $8 each. For Nakoma’s largest customer, Nakoma estimates the likelihood of cumulative purchases for the year as follows: 15% for 400 units, 50% for 800 units, and 35% for 1,200 units. The revenue contract stipulates that the price per unit of product will be adjusted retroactively once…
grandpa clocks incorporated (cgi), a retailer of wall, mantle, and grandfather clocks. Assume gci sells a grandfather clock for $18,500 cash plus 4 percent sales tax. The clock had originaly cost gci $14,500. Asssume gci uses a perpetual inventory system. Indicate the effects of the amounts for the above transactions (enter any decreases to assets, liabilities, or stockholders equity with a minus sign)

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