Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 5, Problem 5.23E
Installment sales method
Charter Corporation, which began business in 2018, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2018 and 2019:
| 2018 2019 | ||
| Installment sales | $360,000 | $350,000 |
| Cost of installment sales | 234,000 | 245,000 |
| Cash collections on installment sales during: | ||
| 2018 | 150,000 | 100,000 |
| 2019 | — | 120,000 |
Required:
1. How much gross profit should Charter recognize in 2018 and 2019 from installment sales?
2. What should be the balance in the deferred gross profit account at the end of 2018 and 2019?
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What is the amount of realized gross profit to be received on December 31, 2020
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uses the installment sales method following data were obtained foe sales during 2017
Al-Taweel Corporation, which began business in 2017. appropriately
and 2018 :
2017
2018
Installment sales
OR 140,000
OR130, 000
Cost of installment sales
84,000
91,000
Cash collections on installment sales during
2017
55,000
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Required:
Prepare journal entries for 2017 and 2018 to account for the installment sales and
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The following data for Roco Corp. Are available for 2021:
Installment accounts, receivable 12/31/21
100,000
Installment sales for 2021
350,000
Gross profit on installment sales
40%
1. Using the cost recovery method of reporting installment sales, the realized gross profit for 2021 is
2. Using the installment method of reporting installment sales, the realized gross profit for 2021 is
Chapter 5 Solutions
Intermediate Accounting
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revenue recognition over time...Ch. 5 - Income statement presentation; installment sales...Ch. 5 - Prob. 5.15PCh. 5 - Installment sales; alternative recognition methods...Ch. 5 - Installment sales and cost recovery methods...Ch. 5 - Prob. 5.18PCh. 5 - Franchise sales; installment sales method Olive...Ch. 5 - Prob. 5.1BYPCh. 5 - Judgment Case 52 Satisfaction of performance...Ch. 5 - Judgment Case 53 Satisfaction of performance...Ch. 5 - Prob. 5.4BYPCh. 5 - Prob. 5.5BYPCh. 5 - Prob. 5.6BYPCh. 5 - Prob. 5.8BYPCh. 5 - Prob. 5.9BYPCh. 5 - Prob. 5.10BYPCh. 5 - Prob. 5.11BYPCh. 5 - Prob. 5.12BYPCh. 5 - Prob. 5.13BYPCh. 5 - Prob. 5.14BYPCh. 5 - Prob. 5.15BYPCh. 5 - Prob. 5.16BYPCh. 5 - Prob. 5.19BYPCh. 5 - Prob. 1CCTC
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