Charter Corporation, which began business in 2016, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2016 and 2017: Installment sales Cost of installment sales Cash collections on installment sales during: 2016 2017 Gross profit 2016 2016 $380,000 190,000 170,000 Required: 1. How much gross profit should Charter recognize in 2016 and 2017 from installment sales? Balance in deferred gross profit account 2017 2017 $370,000 259,000 120,000 130,000 2. What should be the balance in the deferred gross profit account at the end of 2016 and 2017? 2016 2017

Charter Corporation, which began business in 2016, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2016 and 2017: Installment sales Cost of installment sales Cash collections on installment sales during: 2016 2017 Gross profit 2016 2016 $380,000 190,000 170,000 Required: 1. How much gross profit should Charter recognize in 2016 and 2017 from installment sales? Balance in deferred gross profit account 2017 2017 $370,000 259,000 120,000 130,000 2. What should be the balance in the deferred gross profit account at the end of 2016 and 2017? 2016 2017

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The balance sheet at the end of 2018 reported Accounts Receivable of $785,500 and Allowance for Doubtful Accounts of $11,783 (credit balance). The company’s total sales during 2019 were $8,350,200. Of these, $1,252,530 were cash sales the rest were credit sales. By the end of the year, the company had collected $6,291,700 of accounts receivable. It also wrote off an account for $10,380. Prepare the journal entry for collections. Account Names DR CR Blank 1. Fill in the blank, read surrounding text. Blank 2. Fill in the blank, read surrounding text. Blank 3. Fill in the blank, read surrounding text. Blank 4. Fill in the blank, read surrounding text. Blank 5. Fill in the blank, read surrounding text. Blank 6. Fill in the blank, read surrounding text. Blank 7. Fill in the blank, read surrounding text. Blank 8. Fill in the blank, read surrounding text. Blank 9. Fill in the blank, read surrounding text. Blank 10. Fill in the blank, read surrounding text. Blank 11.…
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