Since there is no basis for estimating thedegree of collectibility, Astor Co. uses theinstallment method of revenue recognitionfor the following sales:What amount should Astor report asdeferred gross profit in its December 31,2009 balance sheet for the 2008 and 2009sales? Sales900,000600,000Collections from:2008 sales100,000200,0002009 sales300,000Accounts written off:2008 sales150,000500,0002009 sales50,000Gross profit percentage40%30%

Gross profit is profit earned by the company before considering the expenses of the company.

Answered: Since there is no basis for estimating…

Since there is no basis for estimating the degree of collectibility, Astor Co. uses the installment method of revenue recognition for the following sales:

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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A: Definition:

Question

Since there is no basis for estimating the
degree of collectibility, Astor Co. uses the
installment method of revenue recognition
for the following sales:
What amount should Astor report as
deferred gross profit in its December 31,
2009 balance sheet for the 2008 and 2009
sales?

Sales
900,000
600,000
Collections from:
2008 sales
100,000
200,000
2009 sales
300,000
Accounts written off:
2008 sales
150,000
500,000
2009 sales
50,000
Gross profit percentage
40%
30%

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