Newton Co. had installment sales of $1,000,000 and cost of installment sales of $700,000 in 2010. A 2010 sale resulted in a default in 2012, at which time the balance of the installment receivable was $30,000. The repossessed merchandise had a fair value of $15,000. a. Calculate the rate of gross profit on 2010 installment sales. b. Make the entry to record the repossession.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Newton Co. had installment sales of $1,000,000 and cost
of installment sales of $700,000 in 2010. A 2010 sale
resulted in a default in 2012, at which time the balance of
the installment receivable was $30,000. The repossessed
merchandise had a fair value of $15,000.
a. Calculate the rate of gross profit on 2010 installment
sales.
b. Make the entry to record the repossession.
Transcribed Image Text:Newton Co. had installment sales of $1,000,000 and cost of installment sales of $700,000 in 2010. A 2010 sale resulted in a default in 2012, at which time the balance of the installment receivable was $30,000. The repossessed merchandise had a fair value of $15,000. a. Calculate the rate of gross profit on 2010 installment sales. b. Make the entry to record the repossession.
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