with solution On November 1, 20x1, Auto Motors, which maintains a perpetual inventory records sold a new automobile toSpeed for P6,800,000. The cost of the car to the seller is P5,205,000. The buyer paid 30% down payment andreceived a P640,000 allowance on an old car traded, the balance being payable in equal monthly installmentscommencing the month of sale.The monthly amortization was P240,000 inclusive of 12% interest on the unpaid amount of the obligation. Thecar 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. Whenreacquired, the car was appraised to have a fair value of P2,400,000.REQUIRED:5. Gross profit rate in 20x16. Total collections in 20x17. Realized gross profit on installment sales during 20x1CASE 4Motorista, Inc. manufactures jeeps and sells them in installments. Information presented relates to Motorista'soperations for the last three (3) calendar years:20x320x220x1Cost of installment salesGross profit on installmentP8,765,62532%30%28%Outstanding deferred gross profit, Dec. 3120x3 salesP3,113,000907,50020x2 sales20x1 sales2,516,250423,5001,347,500No repossessions were made during the year.REQUIRED:8. Total collections in 20x39. Total realized gross profit in 20x310. Installment receivable balance as of 20x3 The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2:DebitP150,0002,000,000700,0005,550,00030,000CreditInstallment receivable – 20x1Installment receivable – 20x2Inventory, December 31, 20x1PurchasesRepossessionInstallment salesRegular salesDeferred gross profit – 20x1Operating expensesP4,250,0003,850,000540,0001,250,000Additional 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 uncollectedaccount at the time of repossession is P77,500.REQUIRED:11. Total collections in 20x212. Gross profit rate on installment sales for 20x213. Loss on repossession14. Total realized profit on installment sales, net of loss on repossession in 20x215. Net income for 20x2

Case 3) The perpetual inventory method seems to be an inventory management approach that uses an…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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