Cloudy Co. uses the installment sales method of accounting.Information on Cloudy's past operations follows:Installment salesCost of salesGross profit rateInstallment accounts receivable, Dec 31:From 20x1 installment salesFrom 20x2 installment salesFrom 20x3 installment sales390,00020x1300,000210,00030%180,00015. How much was the total realized gross profit in 20x3?a. 98,400b. 79,500c. 89,40020x2405,000243,00040%16. How much was the gain (loss) in the repossession in 20x3?a. (690)b. 690c. (750)20x3495,000321,750In 20x3, a customer defaulted. Accordingly, the merchandise with an estimated value of P15,000was repossessed. The sale was made in 20x1 and the unpaid balance on the date of repossessionwas P22,500.135,00060,000300,000 195,00035%d. 94,500d. 750

Solution:a. 20x1 20x220x3Installment sales 300,000 405,000 495,000less: Collected(Actual…

Cloudy Co. uses the installment sales method of accounting. Information on Cloudy's past operations follows: Installment sales Cost of sales Gross profit rate Installment accounts receivable, Dec 31: From 20x1 installment sales From 20x2 installment sales From 20x3 installment sales - 390,000 20x1 20x2 300,000 405,000 210,000 243,000 30% 40% 180,000 135,000 300,000 20x3 495,000 321,750 35% 60,000 195,000 In 20x3, a customer defaulted. Accordingly, the merchandise with an estimated value of P15,000 was repossessed. The sale was made in 20x1 and the unpaid balance on the date of repossession

Cloudy Co. uses the installment sales method of accounting. Information on Cloudy's past operations follows: Installment sales Cost of sales Gross profit rate Installment accounts receivable, Dec 31: From 20x1 installment sales From 20x2 installment sales From 20x3 installment sales - 390,000 20x1 20x2 300,000 405,000 210,000 243,000 30% 40% 180,000 135,000 300,000 20x3 495,000 321,750 35% 60,000 195,000 In 20x3, a customer defaulted. Accordingly, the merchandise with an estimated value of P15,000 was repossessed. The sale was made in 20x1 and the unpaid balance on the date of repossession

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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