IMO 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 2021 Installment sales ............................ P240,000 P560,000 Cost of installment sales .................... 150,000 364,000 Gross profit percentage ...................... 37.5% 35% • After collecting 95,000 from the sales of 2020, the balance can no longer be collected in 2020. The net realizable value of the item repossessed was P 38,700. • Half of the sales price in 2021 was collected in 2021. Required: Compute the amount and identify the Financial Statement where they will be presented.
IMO 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 2021
Installment sales ............................ P240,000 P560,000
Cost of installment sales .................... 150,000 364,000
Gross profit percentage ...................... 37.5% 35%
• After collecting 95,000 from the sales of 2020, the balance can no longer be collected in 2020. The net realizable value of the item repossessed was P 38,700.
• Half of the sales price in 2021 was collected in 2021.
Required: Compute the amount and identify the Financial Statement where they will be presented.
a. Realized gross profit, 2020
Step by step
Solved in 2 steps
