3 Post Meridian (PM) Co. uses the "installment sales method." PM Co. sells new merchandise costing P10,000 to a customer for P16,000. PM Co. accepts old merchandise with fair value of P3,000 as trade-in and gives the customer a trade-in value of P4.000. PM Co. subsequently collects P6,000 from the customer. Requirements: a. Prepare the journal entry to record the sale. b. Compute for the realized gross profit in the year of sale.

3 Post Meridian (PM) Co. uses the "installment sales method." PM Co. sells new merchandise costing P10,000 to a customer for P16,000. PM Co. accepts old merchandise with fair value of P3,000 as trade-in and gives the customer a trade-in value of P4.000. PM Co. subsequently collects P6,000 from the customer. Requirements: a. Prepare the journal entry to record the sale. b. Compute for the realized gross profit in the year of sale.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 34E

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