Light Drops Company started operations on January 1, 2020, selling home appliances on the installment bases. For 2020 and 2021, th following information are available: 2020 2021 Installment sales 1,200,000 1,500,000 Cost of installment sales 720,000 1,050,000 Collection of 2020 sales 630,000 450,000 Collection of 2021 sales 900,000 Compute for the following: Cost recovery method Installment method Deferred gross profit during 2020 (from 2020 installment sales) [A] [E] Realized gross profit during 2020 (from 2020 installment sales) [B] [F] Deferred gross profit during 2021 (from 2020 and 2021 installment sales) [C] [G] Realized gross profit during 2021 (from 2020 and 2021 installment sales) [D] [H]

Light Drops Company started operations on January 1, 2020, selling home appliances on the installment bases. For 2020 and 2021, th following information are available: 2020 2021 Installment sales 1,200,000 1,500,000 Cost of installment sales 720,000 1,050,000 Collection of 2020 sales 630,000 450,000 Collection of 2021 sales 900,000 Compute for the following: Cost recovery method Installment method Deferred gross profit during 2020 (from 2020 installment sales) [A] [E] Realized gross profit during 2020 (from 2020 installment sales) [B] [F] Deferred gross profit during 2021 (from 2020 and 2021 installment sales) [C] [G] Realized gross profit during 2021 (from 2020 and 2021 installment sales) [D] [H]

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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