Question: Kantor Co. had installment sales of $1,200,000 and cost of installment sales of $900,000 in 2005. A 2005 sale resulted in a default in 2007, at which time the balance of the installment receivable was $40,000. The repossessed merchandise had a fair value of $18,000. Calculate the rate of gross profit on 2005 installment sales.
Question: Kantor Co. had installment sales of $1,200,000 and cost of installment sales of $900,000 in 2005. A 2005 sale resulted in a default in 2007, at which time the balance of the installment receivable was $40,000. The repossessed merchandise had a fair value of $18,000. Calculate the rate of gross profit on 2005 installment sales.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 31E
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Transcribed Image Text:Question:
Kantor Co. had installment sales of $1,200,000 and cost of
installment sales of $900,000 in 2005. A 2005 sale
resulted in a default in 2007, at which time the balance of
the installment receivable was $40,000. The repossessed
merchandise had a fair value of $18,000.
Calculate the rate of gross profit on 2005 installment sales.
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