CASE 2Rusty, Inc. reports gross profit on installment basis. The following data are available:20X2P500,000362,500137,50020X120X3SalesP480,000360,000120,000P600,000432,000168,000Cost of SalesGross profitCash Collections150,00095,000From 20x1 Sales90,000145,000160,000125,000From 20x2 SalesFrom 20x3 SalesDefaults25,00013,000Unpaid balance of 20x1 installment contractsValue assigned to repossessed merchandiseUnpaid balance of 20x2 installment contractsValue assigned to repossessed merchandise30,00012,00032,00018,000REQUIRED:3. Total realized gross profit before loss on repossession for 20x34. Loss on repossession for 20x3 CASE 1TJ Company recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accountsare adjusted, the ledger shows the following:Installment receivable, 20x1Installment receivable, 20x2Deferred gross profit, 20x1Deferred gross profit, 20x2Regular salesCost of regular salesP675,0001,050,000P370,000545,0003,000,0001,920,000Each year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross profiton installment sales was 4% higher than 20x1.REQUIRED: Compute for the following:1. Adjusted deferred gross profit balance (DGP) in 20x22. Total realized gross profit (RGP) in 20x2

CASE 1: Gross Profit it % of regular sale = 3,000,000 - 1,920,0003,000,000…

Company recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accour e adjusted, the ledger shows the following: stallment receivable, 20x1 stallment receivable, 20x2 P675,000 1,050,000 ferred gross profit, 20x1 eferred gross profit, 20x2 gular sales st of regular sales P370,000 545,000 3,000,000 1,920,000 ch year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross pr installment sales was 4% higher than 20x1. EQUIRED: Compute for the following: 1. Adjusted deferred gross profit balance (DGP) in 20x2 2. Total realized gross profit (RGP) in 20x2

Company recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accour e adjusted, the ledger shows the following: stallment receivable, 20x1 stallment receivable, 20x2 P675,000 1,050,000 ferred gross profit, 20x1 eferred gross profit, 20x2 gular sales st of regular sales P370,000 545,000 3,000,000 1,920,000 ch year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross pr installment sales was 4% higher than 20x1. EQUIRED: Compute for the following: 1. Adjusted deferred gross profit balance (DGP) in 20x2 2. Total realized gross profit (RGP) in 20x2

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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