Franco Enterprise uses the installment method of accounting and it has the following data at the year-end: Gross margin on cost 66-2/3% Unrealized gross profit 192,000 Cash collections including down payments 360,000 What was the total amount of sales on installment basis? 648,000 552,000 840,000 480.000

Franco Enterprise uses the installment method of accounting and it has the following data at the year-end: Gross margin on cost 66-2/3% Unrealized gross profit 192,000 Cash collections including down payments 360,000 What was the total amount of sales on installment basis? 648,000 552,000 840,000 480.000

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 1CPA: Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales...

See similar textbooks

Similar questions

Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were 40,000 with a cost of 30,000. In year 3, installment sales were 50,000 with a cost of 25,000. Collections in year 2 were in the amount of 30,000. Collections in year 3 were 10,000 on the year 2 sales and 30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2? a. 2,500 b. 5,000 c. 7,500 d. 10,000
Bloom Company had beginning unadjusted retained earnings of 400,000 in the current year. At the beginning of the current year, Bloom changed its inventory method from LIFO to FIFO, and the cumulative effect (net of taxes) of this change was 28,000. In addition, Bloom earned net income of 150,000 and paid dividends of 30,000 in the current year. Prepare Blooms retained earnings statement for the current year.
Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.
Home Surplus, Inc. began operation in May, 2011 by selling exclusively on the installment basis. Using the installment method of income recognition, the company summarized the following data at the end of the first eight-month period: installment sales, P450,000; various expenses, P23,000; accounts receivable, P330,000; and, inventory, P80,000. If the gross margin based on cost is 66-2/3%, the net income was: a. P25,000 b. P48,000 c. P57,000 d. P80,000
Lovebirds Corporation sells goods on the installment basis. For the year ended December 31, 2011, the following were reported: Cost of installment sales P525,000 Loss on repossessions 13,500 Fair value of repossessed merchandise 112,500 Account defaulted 180,000 Deferred gross profit, December 31 108,000 How much was collected during the year?a. 210,000b. 264,000c. 390,000d. 415,715
TJC recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accounts are adjusted, the ledger shows the following: Installment receivable, 20x1 P675,000 Installment receivable, 20x2 1,050,000 Deferred gross profit, 20x1 P370,000 Deferred gross profit, 20x2 545,000 Regular sales 3,000,000 Cost of regular sales 1,920,000 Each year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross profit on installment sales was 4% higher than 20x1. Compute: Adjusted deferred gross profit balance (DGP) in 20x2 Total realized gross profit (RGP) in 20x2
Addams, Inc. appropriately used the installment method of accounting to recognize income in its financial statement. Some pertinent data relating to this method of accounting include: 2021 2022 Installment sales $750,000 $900,000 Cost of sales 450,000 630,000 Gross profit $300,000 $270,000 Collections during year: On 2021 sales 200,000 200,000 On 2022 sales 240,000 What amount of deferred gross profit should be reported on Addams’ income statement for 2021? a. $80,000 b. $100,000 c. $220,000 d. $300,000 What amount of realized gross profit should be reported on Addams’ income statement for 2022? a. $132,000 b. $152,000 c. $176,000 d. $216,000
TIKTOK Company which began business on January 1, 2020, appropriately uses the installment sales method of accounting, the following data are available for 2020:Installment accounts receivable, 12/31/2020 P200,000Deferred Gross Profit, 12/31/2020 (before recognition 140,000of realized gross profit)Gross Profit on Sales 40%The cash collections and the realized gross profit on installment sales for the year ended December 31, 2020 should be:Cash Collections Realized Gross Profita. P100,000 P80,000b. 100,000 60,000c. 150,000 80,000d. 150,000 60,000
Portia Co. uses the installment method of income recognition. The entity provided the following pertinent data:20x1 20x2 20x3Installment sales P600,000 P750,000 P720,000Cost of goods sold 450,000 570,000 504,000Balance of deferred gross profit at year-end20x1 105,000 30,000 -20x2 108,000 18,00020x3 144,000 REQUIRED:1. Total balance of Installment Receivable on December 31, 20x3 ____________ Reginald Company, which began operations on January 5, 20x1, appropriately uses the install method ofrevenue recognition. The following information pertains to the operations for 20x1 and 20x2:20x1 20x2Sales P600,000 P900,000Collections from:20x1 sales 200,000 100,00020x2 sales 300,000Accounts written off from:20x1 sales 50,000 150,00020x2 sales 300,000Gross profit rates 30% 40% REQUIRED:2. Deferred gross profit on December 31, 20x2 ______________3. Realized gross profit in 20x2 ______________
The Mylene, Inc. began operating at the beginning of the calendar year 2020 and, using the installment method of accounting, presented the following data for the first year: Installment sales - P400,000; Gross margin based on cost - 66-2/3%; Inventory, December 31, 2020 - P80,000; General and administrative expense - P40,000; Accounts Receivable, December 31, 2020 - P320,000. The balance of the deferred gross profit account should be?
ABC Corporation sells merchandise on the installment basis, and the uncertainties of cash collection make the use of the installment sales method of accounting acceptable. The following data relate to two years of operations. 2020 2021Installment sales ............................ P500,000 P600,000Cost of installment sales .................... ? ?Gross profit ................................. 180,000 150,000Gross profit percentage ...................... ? ?The realized gross profit for 2020 was 132,500 which includes 62,500 for 2020 sale. How much was the total collection for the year 2020?