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How do you calculate gross profit in the installment sales method
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 -------------------------------------------------------------------------------- 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 $ -------------------------------------------------------------------------------- (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 $ $ -------------------------------------------------------------------------------- Check my workeBook Linkreferences ?(C)2011 The McGraw-Hill Companies. All rights reserved. . Requires a modern browser - e.g. Safari 1, Netscape 6 or IE 5 . . |
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