Oro Company began operations on January 1, 2021 and appropriately uses the installment sales method of accounting. The followin data are available for 2020 and 2021: 2020 2021 Installment sales 1,500,000 1,800,000 Gross profit on sales 30% 40% Cash collections from: 2020 sales 500,000 600,000 2021 sales 700,000 The realized gross profit for 2021 is: 720,000 520,000 460,000 280,000

Oro Company began operations on January 1, 2021 and appropriately uses the installment sales method of accounting. The followin data are available for 2020 and 2021: 2020 2021 Installment sales 1,500,000 1,800,000 Gross profit on sales 30% 40% Cash collections from: 2020 sales 500,000 600,000 2021 sales 700,000 The realized gross profit for 2021 is: 720,000 520,000 460,000 280,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...

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Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Plantito Company began operations on January 1, 2019 and appropriately uses the installment method of accounting. The following data are available for 2019 and 2020.2019 2020Installment Sales P1,200,000 P1,500,000Cash collections from:2019 sales P400,000 P500,0002020 sales P600,000Gross Profit on sales 30% 40%The realized gross profit for 2020 isa. P240,000 c. P440,000b. P390,000 d. P600,000
TIKTOK Company which began business on January 1, 2020, appropriately uses the installment sales method of accounting, the following data are available for 2020:Installment accounts receivable, 12/31/2020 P200,000Deferred Gross Profit, 12/31/2020 (before recognition 140,000of realized gross profit)Gross Profit on Sales 40%The cash collections and the realized gross profit on installment sales for the year ended December 31, 2020 should be:Cash Collections Realized Gross Profita. P100,000 P80,000b. 100,000 60,000c. 150,000 80,000d. 150,000 60,000
What is the amount of realized gross profit to be received on December 31, 2020
Daze Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2020 and 2021. 2020 2021 Installment sales $800,000 $1,000,000 Cost of installment sales 480,000 650,000 Cash collections on sales of 2020 300,000 500,000 Cash collections on sales of 2021 -0- 400,000 Compute the amount of realized gross profit recognized in each year.
ABC Corporation sells merchandise on the installment basis, and the uncertainties of cash collection make the use of the installment sales method of accounting acceptable. The following data relate to two years of operations. 2019 2020Cost of sales P500,000 P600,000Gross profit based on sales 25% 20%Collection from: 2019 sales 180,000 150,0002020 sales 250,000 How much was the total realized gross for the year 2020? Prepare the journal entries for collection and realized profit.
Combate Company reported total purchases of P3,200,000 in its accrual basis financial statement on December 31, 2020. Additional information revealed the following: Accounts payable, December 31, 2019 P900,000 Accounts payable- December 31, 2020 1,250,000 What is the amount of purchases under the cash basis for the year ended December 31, 2020? A.P4,100,000 B. P4,450,000 C. P2,850,000 D. P3,550,000
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 4. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000 ADD EXPLANATION THANKS
Excerpts from the annual report of XYZ Corporation follow: 2019 $675,138 $241,154 $64,150 $93,650 $25,100 2020 Cost of goods sold Inventory Net income $754,661 $219,686 $31,185 $68,685 $26,900 Retained earnings LIFO reserve Tax rate 20% 20% If XYZ used FIFO, its net income for fiscal 2020 would be O a. $34,165 O b. $30,375 O c. $32,625 d. $36,545
Berlin Corp. reported the following data for 2021: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 ADD EXPLANATION THANKS