Use the following information for the next two questions: Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2 Sales 300,000 480,000 Cost of sales 240,000 336,000 Installment receivable- 20x1 180,000 60,000 Installment receivable- 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were ₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normal profit margin on resale of repossessed property is 30%. a.) How much is the gain or loss on repossession? b.) How much is the total realized gross profit in 20x2?
Use the following information for the next two questions: Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2 Sales 300,000 480,000 Cost of sales 240,000 336,000 Installment receivable- 20x1 180,000 60,000 Installment receivable- 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were ₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normal profit margin on resale of repossessed property is 30%. a.) How much is the gain or loss on repossession? b.) How much is the total realized gross profit in 20x2?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the following information for the next two questions:
Rooster Co. uses the installment sales method. Relevant information follows:
| 20x1 | 20x2 | |
| Sales | 300,000 | 480,000 |
| Cost of sales | 240,000 | 336,000 |
| Installment receivable- 20x1 | 180,000 | 60,000 |
| Installment receivable- 20x2 | 360,000 |
Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were ₱24,000.
Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normal profit margin on resale of repossessed property is 30%.
a.) How much is the gain or loss on repossession?
b.) How much is the total realized gross profit in 20x2?
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