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E18-21B (Gross Profit Calculations and Repossessed Merchandise)Duke Corporation appropriately uses the installment-sales method of accounting. The following data were obtained for the years 2014 and 2015. Duke did not make any installment sales prior to 2

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E18-21B (Gross Profit Calculations and Repossessed Merchandise)Duke Corporation appropriately uses the installment-sales method of accounting. The following data were obtained for the years 2014 and 2015. Duke did not make any installment sales prior to 2014.;2014 2015;Installment sales $600,000 $530,000;Cost of installment sales 480,000 434,600;General & administrative expenses 25,000 30,000;Cash collections on sales of 2014 250,000 285,000;Cash collections on sales of 2015 ?0? 168,000;Instructions;(a) Compute the balance in the deferred gross profit accounts on December 31, 2014, and on December 31, 2015.;(b) A 2014 sale resulted in default in 2016. At the date of default, the balance on the installment receivable was $12,000, and the repossessed merchandise had a fair value of $8,000. Prepare the entry to record the repossession.;(AICPA adapted)

 

Paper#75346 | Written in 18-Jul-2015

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