Kathleen Stege


Intermediate Accounting I: Fall 2011








Chapter 5 homework

Instructions | help



































2.

Value:
2 points






Exercise 5-2 Installment sales method [LO2]





Charter Corporation, which began business in 2011, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2011 and 2012:






2011

2012



Installment sales

$

360,000



$

350,000





Cost of installment sales



234,000





245,000





Cash collections on installment sales during:















2011



150,000





100,000





2012



?





120,000






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Required:



(1)


How much gross profit should Charter recognize in 2011 and 2012 from installment sales? (Do not round intermediate calculations. Omit the "$" sign in your response.)






Gross Profit



2011

$



2012

$




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(2)


What should be the balance in the deferred gross profit account at the end of 2011 and 2012? (Do not round intermediate calculations. Omit the "$" sign in your response.)






2011

2012



Balance in deferred gross profit account

$

$




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