Edith Motors sells automobiles on installment. Information presented below relates to Edith's operations for the last three years: 2021 2020 2019 Installment Sales 1,075,000 Gross margin on cost 66 2/3% 33 1/3% 25% Outstanding Installment Receivable as of December 31: From 2021 Sales 698,750 From 2020 Sales 234,000 585,000
Edith Motors sells automobiles on installment. Information presented below relates to Edith's operations for the last three years: 2021 2020 2019 Installment Sales 1,075,000 Gross margin on cost 66 2/3% 33 1/3% 25% Outstanding Installment Receivable as of December 31: From 2021 Sales 698,750 From 2020 Sales 234,000 585,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Edith Motors sells automobiles on installment. Information presented below relates to Edith's
operations for the last three years:
2021
2020
2019
Installment Sales
1,075,000
Gross margin on cost
66 2/3%
33 1/3%
25%
Outstanding Installment Receivable as of
December 31:
From 2021 Sales
698,750
From 2020 Sales
234,000
585,000
From 2019 Sales
330,400
865,400
During 2020, Edith repossessed an automobile that it has sold for P160,000 on installment
basis in 2019. The installment receivable balance related to this repossessed merchandise is
P64,000. The company expects to resell the repossessed item for P56,000 before any
reconditioning cost. Reconditioning cost amount to P7,500. The company's normal profit
margin on sale of used automobile is 15%.
Compute for realized gross profit in 2021
P304,330
O P291,530
O P219,530
Р340,330
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