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ommencing the month of sale. he monthly amortization was P240,000 inclusive of 12% interest on the unpai ar traded-in has a wholesale value of P960,000 after expending reconditioning After paying three (3) installments, the buyer defaulted, and the car was sut eacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1

ommencing the month of sale. he monthly amortization was P240,000 inclusive of 12% interest on the unpai ar traded-in has a wholesale value of P960,000 after expending reconditioning After paying three (3) installments, the buyer defaulted, and the car was sut eacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1

FINANCIAL ACCOUNTING
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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On November 1, 20x1, Auto Motors, which maintains a perpetual inventory records sold a new automobile to Speed for P6,800,000. The cost of the car to the seller is P5,205,000. The buyer paid 30% down payment and received a P640,000 allowance on an old car traded, the balance being payable in equal monthly installments commencing the month of sale. The monthly amortization was P240,000 inclusive of 12% interest on the unpaid amount of the obligation. The car traded-in has a wholesale value of P960,000 after expending reconditioning cost of P180,000. After paying three (3) installments, the buyer defaulted, and the car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1 CASE 4 Motorista, Inc. manufactures jeeps and sells them in installments. Information presented relates to Motorista's operations for the last three (3) calendar years: 20x3 20x2 20x1 Cost of installment sales Gross profit on installment P8,765,625 32% 30% 28% Outstanding deferred gross profit, Dec. 31 20x3 sales P3,113,000 907,500 20x2 sales 20x1 sales 2,516,250 423,500 1,347,500 No repossessions were made during the year. REQUIRED: 8. Total collections in 20x3 9. Total realized gross profit in 20x3 10. Installment receivable balance as of 20x3
Transcribed Image Text:On November 1, 20x1, Auto Motors, which maintains a perpetual inventory records sold a new automobile to Speed for P6,800,000. The cost of the car to the seller is P5,205,000. The buyer paid 30% down payment and received a P640,000 allowance on an old car traded, the balance being payable in equal monthly installments commencing the month of sale. The monthly amortization was P240,000 inclusive of 12% interest on the unpaid amount of the obligation. The car traded-in has a wholesale value of P960,000 after expending reconditioning cost of P180,000. After paying three (3) installments, the buyer defaulted, and the car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1 CASE 4 Motorista, Inc. manufactures jeeps and sells them in installments. Information presented relates to Motorista's operations for the last three (3) calendar years: 20x3 20x2 20x1 Cost of installment sales Gross profit on installment P8,765,625 32% 30% 28% Outstanding deferred gross profit, Dec. 31 20x3 sales P3,113,000 907,500 20x2 sales 20x1 sales 2,516,250 423,500 1,347,500 No repossessions were made during the year. REQUIRED: 8. Total collections in 20x3 9. Total realized gross profit in 20x3 10. Installment receivable balance as of 20x3
The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2: Debit P150,000 2,000,000 700,000 5,550,000 30,000 Credit Installment receivable – 20x1 Installment receivable – 20x2 Inventory, December 31, 20x1 Purchases Repossession Installment sales Regular sales Deferred gross profit – 20x1 Operating expenses P4,250,000 3,850,000 540,000 1,250,000 Additional information: Installment receivable – 20x1 as of December 31, 20x1 is P1,200,000. Inventory of new and repossessed merchandise as of December 31, 20x2 is P950,000. Gross profit percentage of regular sales during the year is 30% based on sales. Repossession was made during the year. It was a 20x1 sale, and the corresponding uncollected account at the time of repossession is P77,500. REQUIRED: 11. Total collections in 20x2 12. Gross profit rate on installment sales for 20x2 13. Loss on repossession 14. Total realized profit on installment sales, net of loss on repossession in 20x2 15. Net income for 20x2
Transcribed Image Text:The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2: Debit P150,000 2,000,000 700,000 5,550,000 30,000 Credit Installment receivable – 20x1 Installment receivable – 20x2 Inventory, December 31, 20x1 Purchases Repossession Installment sales Regular sales Deferred gross profit – 20x1 Operating expenses P4,250,000 3,850,000 540,000 1,250,000 Additional information: Installment receivable – 20x1 as of December 31, 20x1 is P1,200,000. Inventory of new and repossessed merchandise as of December 31, 20x2 is P950,000. Gross profit percentage of regular sales during the year is 30% based on sales. Repossession was made during the year. It was a 20x1 sale, and the corresponding uncollected account at the time of repossession is P77,500. REQUIRED: 11. Total collections in 20x2 12. Gross profit rate on installment sales for 20x2 13. Loss on repossession 14. Total realized profit on installment sales, net of loss on repossession in 20x2 15. Net income for 20x2
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