Installment Sales (1) aDVAC

Chapter # 7
Installment Sales
Sameer Hussain
www.a4accounting.weebly.com
Installment Sales
Chapter # 7
SYLLABUS ACCORDING TO UNIVERSITY OF KARACHI:
Accounting for installment sales under Perpetual Inventory System.

Defaults and repossessions.
Recognition of realized gross profit.
Reporting of relevant accounts on Financial Statement.
WHAT THE EXAMINER USUALLY ASK?
Computation of:
o Installment sales.
o Cost of installment sales.
o Unrealized gross profit (D.G.P.).
o Unrealized gross profit rate (D.G.P. %).
o Cash collection.
o Realized gross profit (R.G.P.).
o Gain or loss on repossession.
o Loss on default.
General Journal entries under Perpetual Inventory System.
Adjusting and closing entries under Perpetual Inventory System.
Income Statement.
Balance Sheet.
Sameer Hussain
Page 104
Installment Sales
Chapter # 7
INSTALLMENT SALES
Goods purchase by buyer by paying a small amount of the total amount of goods at the time of
purchase of goods and agrees to pay the remaining amount in equal installments in equal
interval of time is known as installment. The first time payment is known as down payment. In
installment sales, the risk and rewards are transferred to the buyer.
COST OF INSTALLMENT SALES
The cost of merchandise sold on installment basis is called cost of installment sales. It is
obtained by adding net purchases in the merchandise inventory beginning and subtracting
merchandise inventory ending.
UNREALIZED GROSS PROFIT
Unrealized gross profit is referred to the total gross profit from the sale of merchandise on
installment basis which has not been collected. It is also known as Deferred Gross Profit.
REALIZED GROSS PROFIT
The profit on sale on merchandise on installment basis collected during the period out of total
unrealized gross profit is called realized gross profit. In other words, it is the profit which has
been collected during the period.
COMPUTATION OF COST OF INSTALLMENT SALES:

Merchandise inventory (beginning)
Add: Net purchases during the period
Merchandise available for sale
Less: Merchandise inventory (ending)
Cost of installment sales
XXX
XXX
XXX
(XXX)
XXX
COMPUTATION OF UNREALIZED GROSS PROFIT (D.G.P.):

Unrealized gross profit (D.G.P.) =
Installment sales Cost of installment sales
COMPUTATION OF UNREALIZED GROSS PROFIT RATE (D.G.P. %):

Unrealized gross profit Rate (D.G.P. %) =
Unrealized gross profit

Installment sales
X 100
COMPUTATION OF CASH COLLECTION:

Cash collection (current year) =
Cash collection (previous year) =
Cash collection =
Installment sales Installment accounts

receivable (ending)
OR
Installment accounts receivable (beginning)
Installment accounts receivable (ending)
Installment accounts receivable cancelled
OR
Down payment + Installments received
COMPUTATION OF REALIZED GROSS PROFIT (R.G.P.):

Realized gross profit (R.G.P.) =
Cash collection x Unrealized gross profit rate
Page 105
Sameer Hussain
Installment Sales
Chapter # 7
COMPUTATION OF INSTALLMENT SALES / INSTALLMENT ACCOUNTS

RECEIVABLE (BEGINNING):
Installment sales/installment accounts
receivable (beginning) =
Unrealized gross profit (D.G.P.)

Unrealized gross profit rate
(D.G.P.%)
COMPUTATION OF LOSS ON DEFAULT:
If the buyer is unable to pay the further installments and the seller is unable to repossess his
goods from the buyer, it is said to be default.
Less: D.G.P. for go (Installment accounts receivable cancelled x D.G.P. %)
Loss on default
XXX
(XXX)
(XXX)
COMPUTATION OF GAIN OR LOSS ON REPOSSESSION:
If the buyer is unable to pay the further installments and the seller repossesses his goods from
the buyer, it is said to be repossession of merchandise.
Less: D.G.P. for go (Installment accounts receivable cancelled x D.G.P. %)
Book value
Less: Merchandise repossessed at fair market value
Gain/loss on repossession
XXX
(XXX)
XXX
(XXX)
XXX/(XXX)
GENERAL ENTRIES UNDER PERPETUAL SYSTEM:
o Purchased Merchandise on Account:

Merchandise
DR. (with amount of purchases)
Accounts payable
CR. (with amount of payable)
-----------------------------------------------------------------------------------------------------------o Sold Merchandise on Installment Basis:
Installment accounts receivable
DR. (amount receivable as installment)
Installment sales
CR. (amount of installment sales)
-----------------------------------------------------------------------------------------------------------Cash Collection on Installment Basis / Down Payment Received:
DR. (with amount of cash collection)
CR. (amount of cash collection)
-----------------------------------------------------------------------------------------------------------o
Cash
o Payment to Suppliers:
Accounts payable
DR. (with amount of cash paid)
Cash
CR. (with amount of cash paid)
-----------------------------------------------------------------------------------------------------------o Expense Paid During the Period:
Expenses
Cash
Sameer Hussain
DR. (with amount of expenses paid)

CR. (with amount of cash paid)
Page 106
Installment Sales
Chapter # 7
o Recording Loss on Default:
DR. (with amount of D.G.P. on default)
Loss on default
DR. (with amount of loss on default)
CR. (installment A/R cancelled)
-----------------------------------------------------------------------------------------------------------o Recording Gain on Repossession:
Merchandise repossessed
DR. (with repossessed value)
Gain on default
CR. (amount of gain)
-----------------------------------------------------------------------------------------------------------o Recording Loss on Repossession:
DR. (with repossessed value)
Loss on default
DR. (with amount of loss on repossession)
------------------------------------------------------------------------------------------------------------
ADJUSTING ENTRIES UNDER PERPETUAL SYSTEM:
o Recording Cost of Goods Sold:

DR. (amount of cost of installment sales)
Merchandise
CR. (amount of cost of goods sold)
-----------------------------------------------------------------------------------------------------------o Recording Unrealized Gross Profit (D.G.P.):
Installment sales
DR. (with amount of installment sales)
CR. (amount of D.G.P.)
CR. (amount of cost of sales)
-----------------------------------------------------------------------------------------------------------o Recording Realized Gross Profit (R.G.P.):
DR. (with amount of realized gross profit)
Realized gross profit (R.G.P.)
CR. (with amount of R.G.P.)
------------------------------------------------------------------------------------------------------------
CLOSING ENTRIES UNDER PERPETUAL SYSTEM:
o Closing Expenses:
Expense and revenue summary
DR.
Expenses
CR.
Loss on repossession/default
CR.
-----------------------------------------------------------------------------------------------------------o Closing Income:
Realized gross profit (R.G.P.)
DR.
Interest income
DR.
Gain on repossession
DR.
CR.
------------------------------------------------------------------------------------------------------------
Page 107
Sameer Hussain
Installment Sales
Chapter # 7
Realized Gross Profit (RGP)
Cash Collection
Installment A/R
(Beg) or
Installment
sales
X
Installment
Accounts
Receivable
(Ending)
Unrealized Gross Profit Rate

(DGP%)
Unrealized
Gross Profit
(DGP)
Installment Sales
Installment Sales
Cost of Installment Sales
Merchandise Inventory (Beginning)

+
Total Net Purchases
Merchandise Inventory (Ending)
ILLUSTRATION # 1:
(Simple Data)
Ali Company deals in radio and television sets. It sells those sets on installment basis. The
summary of transactions for the year ended 31 December 1995 is as follows:
1) Purchase on account
Rs. 103,500
2) Installment sales
Rs. 125,000
3) Cost of installment sales
Rs. 100,000
4) Collection of installment accounts receivable
Rs.
90,000
5) Payment to accounts payable
Rs.
95,000
6) Selling expenses paid
Rs.
1,200
7) General expenses paid
Rs.
2,300
8) Repossessed merchandise at fair market value
Rs.
3,000
9) Installment accounts receivable written off by repossession
Rs.
10,500
REQUIRED
Give journal entries for the year ended 31st Dec. 1995 including adjusting and closing entries.
SOLUTION # 1:
Computation of Unrealized Gross Profit (DGP):

Unrealized gross profit =
125,000 100,000
25,000
Computation of Unrealized Gross Profit Rate (DGP%):
Unrealized gross profit rate =
Installment sales
25,000
125,000
20%
x 100
x 100
Computation of Realized Gross Profit (RGP):

Realized gross profit =
Cash collection X DGP%
90,000 x 20%
18,000
Sameer Hussain
Page 108
Installment Sales
Chapter # 7
Computation of Gain or Loss on Repossession:
Less: Unrealized gross profit (10,500 x 20%)
Book value
Loss on repossession
Date
1
2
3
4
5
6
7
8
9
10
Date
1
ALI COMPANY
GENERAL JOURNAL
Particulars
10,500
(2,100)
8,400
3,000
5,400
P/R
Merchandise
Accounts payable
(To record the merchandise purchased on account)
Installment sales
(To record the good sold on installment basis)
Cash
(To record the cash collected on installment basis)
Accounts payable
Cash
(To record the payment to suppliers)
Selling expenses
Cash
(To record the selling expenses paid)
General expenses
Cash
(To record the general expenses paid)
(To record the repossession of merchandise)
Merchandise
(To record the cost of installment sales)
Installment sales
(To adjust the unrealized gross profit)
Realized gross profit
(To adjust the realized gross profit)
ALI COMPANY
CLOSING ENTRIES
Particulars
Selling expenses
General expenses
(To close the all expense accounts)
Page 109
Debit
103,500
Credit
103,500
125,000
125,000
90,000
90,000
95,000
1,200
95,000
1,200
2,300
2,300
3,000
2,100
5,400
10,500
100,000
100,000
125,000
18,000
P/R
Debit
8,900
100,000
25,000
18,000
Credit
1,200
2,300
5,400
Sameer Hussain
Installment Sales
Chapter # 7
Date
2
3
Particulars
(To close the all income accounts)
Capital
(To close the expense and revenue summary
account)
ILLUSTRATION # 2:
P/R
Debit
18,000
9,100
Credit
18,000
9,100
(Different Years Data)
The selected balances of ABC Installment Sales Co. are as follows:
2007 Jan. 1
Installment accounts receivable - 2005
90,000
Installment accounts receivable 2006
285,000
Deferred gross profit 2005
22,500
85,500
Installment sales
Repossessed merchandise
Installment account receivable2005 cancelled on repossession
REQUIRED
a) Gross profit realized during 2007.
b) General Journal entries including adjusting entries during 2007.
2007 Dec. 31
135,000
337,500
18,750
85,500
450,000
306,000
12,000
15,000
SOLUTION # 2:
Computation of Unrealized Gross Profit (DGP) (2007):

450,000 306,000
144,000
Unrealized gross profit rate (2007) =
Installment sales
144,000
450,000
Unrealized gross profit rate (2007)=
32%
Sameer Hussain
x 100
x 100
Unrealized gross profit (Beg)

Installment A/R (Beg)
85,500
285,000
30%
x 100

22,500
90,000
25%
x 100
Page 110
x 100
x 100
Installment Sales
Chapter # 7
Computation of Cash Collection:
Cash collection (2007) =
Installment sales Installment accounts receivable (ending)
450,000 337,500
112,500
Installment A/R (Beg) Installment A/R (End)

285,000 135,000
150,000
Installment A/R (Beg) Installment A/R (End) Installment

A/R cancelled
90,000 0 15,000
75,000

Computation of Realized Gross Profit:

Realized gross profit (2007) =
112,500 x 32%
150,000 x 30%
75,000 x 25%
Total realized gross profit =
36,000
45,000
18,750
99,750

Less: Unrealized gross profit (15,000 x 25%)
Book value
Date
1
2
4
5
ABC INSTALLMENT SALES CO.

GENERAL JOURNAL
Particulars
P/R
Installment accounts receivable (2007)
Installment sales
Cash
Unrealized gross profit (2005)
(To adjust the repossession of merchandise)
Merchandise
Installment sales
Page 111
15,000
(3,750)
11,250
(12,000)
750
Debit
450,000
Credit
450,000
337,500
12,000
3,750
306,000
112,500
150,000
75,000
750
15,000
306,000
450,000
306,000
144,000
Sameer Hussain
Installment Sales
Chapter # 7
Date
6
Particulars
ILLUSTRATION # 3:
P/R
Debit
36,000
45,000
18,750
Credit
99,750
(Data Based on Units)
The following are transactions for 2008 of XYZ Installment Sales Company which follows the
perpetual system and FIFO method for inventory valuation had 25 machines @ Rs.290 per
machine in beginning inventory:
(a) Purchased 150 machines @ Rs.300/- per machine.
(b) Sold 125 machines @ Rs.500/- per machine.
(c) Received down payment @ Rs.100/- per machine.
(d) Received 497 installments @ Rs.50/- per installment.
(e) Repossesses one machine from a customer at a fair market value of Rs.200, who had
paid only down payment and one installment.
REQUIRED
Give General Journal entries including adjusting entry supported by proper computations. Also
determine ending inventory of merchandise.
SOLUTION # 3:
Computation of Merchandise Inventory Ending:

Merchandise inventory opening units
Add: Units purchases
Merchandise available for sale in units
Less: Units sold
Merchandise inventory ending in units
Merchandise inventory ending =
Units at end x Cost per unit
50 x 300
Rs.15,000
Computation of Cost of Installment Sales:
Merchandise inventory opening (25 x 290)
Add: Purchases (150 x 300)
Less: Merchandise inventory ending
Computation of Installment Sales:
Installment sales =
Installment sales =
Installment sales =
25
150
175
(125)
50
7,250
45,000
52,250
(15,000)
Rs.37,250
Units sold x Selling price per unit

125 x 500
Rs.62,500
Computation of Unrealized Gross Profit:

62,500 37,250
Rs.25,250
Sameer Hussain
Page 112
Installment Sales
Chapter # 7
Installment sales
25,250
62,500
40.4%
x 100
x 100

Down payment (125 x 100)
Add: Installment received (497 x 50)
Total cash collection
12,500
24,850
Rs.37,350

37,350 x 40.4%
Rs.15,089
Installment sales
Less: Down payment
Less: Installment received
Less: Unrealized gross profit (350 x 40.4%)
Book value
Date
1
2
3
4
5
XYZ INSTALLMENT SALES COMPANY

GENERAL JOURNAL
Particulars
P/R
Merchandise (150 x 300)
Accounts payable
(To record the goods purchased on account)
Installment sales
Cash
(To record the down payment received)
Cash
(To adjust the repossession of merchandise)
Merchandise
Page 113
500
(100)
400
(50)
350
(141)
209
(200)
Rs.9
Debit
45,000
62,500
Credit
45,000
62,500
12,500
12,500
24,850
24,850
200
141
9
350
37,250
37,250
Sameer Hussain
Installment Sales
Chapter # 7
Date
7
Particulars
Installment sales
P/R
Debit
62,500
Credit
37,250
25,250
15,089
15,089
INCOME STATEMENT
Sales
Less: Cost of goods sold
Gross profit
Add: Realized gross profit (RGP)
Total gross profit
Less: Operating expenses
Net profit
XXX
(XXX)
XXX
XXX
XXX
(XXX)
XXX
BALANCE SHEET
Assets
Current Assets:
Cash
Accounts receivable
Installment A/R (1st year)
Installment A/R (2nd year)
Merchandise inventory
Other current assets
Total current assets
Fixed Assets:
Land
Other fixed assets
Total fixed assets
Total assets
ILLUSTRATION # 4:
(Rupees)
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
Equities
Liabilities:
Accounts payable
Other liabilities
Total liabilities
Owners Equity:
Capital
Add: Net profit
Add: D.G.P (1st year)
Add: D.G.P (2nd year)
Total owners equity
Total equities
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
(FINANCIAL STATEMENTS)
The following trial balance has been prepared from the ledger of Imran & Co:
IMRAN & CO.
TRIAL BALANCE
AS ON DECEMBER 31, 2001
Debit (Rs.)
Cash
33,750
123,750
27,000
Accounts receivable
60,750
Inventory January 1, 2001
117,000
Land and building
45,000
Accounts payable
Share capital
Retained earnings
Sameer Hussain
(Rupees)
Page 114
Credit (Rs.)
112,500
81,000
225,000
16,250
Installment Sales
Chapter # 7
Sales
Installment sales
Purchases
Shipment on installment sales
Operating expenses
418,750
720,000
750,000
540,000
540,000
416,250
2,113,500
Total
2,113,500
Other Information:
Inventory of merchandise on December 31, 2001 was Rs.123,750. The following account
balances were found in the post-closing trial balance prepared on January 1, 2001.
270,000
81,000
REQUIRED
(a) Prepare Income Statement and Balance Sheet for the year ended on Dec. 31, 2001.
(b) Pass the adjusting and closing entries.
SOLUTION # 4:
Computation of Unrealized Gross Profit:

720,000 540,000
Rs.180,000
Installment sales
180,000
720,000
25%
x 100
x 100

81,000
270,000
30%
x 100
x 100

Installment sales Installment accounts receivable (ending)
720,000 123,750
Rs.596,250
Installment A/R (Beg) Installment A/R (End)

270,000 27,000
Rs.243,000

596,250 x 25%
243,000 x 30%
Total realized gross profit =
Page 115
149,063
72,900
Rs.221,963
Sameer Hussain
Installment Sales
Chapter # 7
Imran & Co.
Income Statement
For the Period Ended 31 December 2001
(Rupees)
Sales
Less: Cost of Goods Sold:
Add: Net purchases
Less: Shipment on installment sales
Less: Merchandise inventory (ending)
Cost of goods sold
Gross profit
Add: Realized gross profit (R.G.P)
Total gross profit
Less: Operating expenses
Net profit
117,000
750,000
867,000
(540,000)
(123,750)
(203,250)
215,500
221,963
437,463
(416,250)
21,213
Computation of Retained Earnings Ending Balance:

Retained earnings (unadjusted balance)
Add: Net profit for the period
Retained earnings adjusted balance
Assets
Current Assets:
Cash
Accounts receivable
Installment A/R (2001)
Installment A/R (2000)
Merchandise inventory
Total current assets
Fixed Assets:
Land and building
Total fixed assets
Total assets
Sameer Hussain
(Rupees)
418,750
16,250
21,213
Rs.37,463
Imran & Co.

Balance Sheet
As on 31 December 2001
(Rupees)
Equities
Liabilities:
33,750 Accounts payable
60,750 Total liabilities
123,750
27,000 Owners Equity:
123,750 Share capital
369,000 Add: Retained earnings
Add: D.G.P (2001)
Add: D.G.P (2000)
45,000
Total owners equity
45,000
414,000 Total equities
Page 116
(Rupees)
112,500
112,500
225,000
37,463
30,937
8,100
301,500
414,000
Installment Sales
Chapter # 7
Date
1
2
Imran & Co.

Adjusting & Closing Entries
Particulars
P/R
Merchandise
Installment sales
Purchases
Operating expenses
(To close the various expense accounts)
Sales
Merchandise inventory (ending)
(To close the various income accounts)
Retained earnings
(To record the transfer of net profit to retained
earnings account)
Page 117
Debit
540,000
720,000
149,063
72,900
1,283,250
Credit
540,000
540,000
180,000
221,963
117,000
750,000
416,250
418,750
540,000
123,750
221,963
1,304,463
21,213
21,213
Sameer Hussain
Installment Sales
Chapter # 7
PRACTICE QUESTIONS
Question # 1:
1996 Private (Advanced & Cost Accounting) UOK
Standard Company sells merchandise on installment basis and uses perpetual system. Its
transactions relating to sales for 1995 are as follows:
1. Installment sales
Rs.800,000
2. Cost of installment sales
600,000
3. Collection of installments
500,000
REQUIRED
General Journal entries including adjusting entries.
Question # 2:
Merchandise sold on installment at a gross profit of 30% was repossessed at a market value of
Rs.4,000 and installment accounts receivable of Rs.5,000 were cancelled on repossession.
REQUIRED
Give journal entries.
Question # 3:
A merchant sells merchandise on installment basis, at a gross profit of 42%. The invoice price of
merchandise is Rs.8,000. One customer defaults and the amount receivable from him is
Rs.6,600. The merchandise was repossessed and given an inventory of Rs.3,250.
REQUIRED
Give necessary entries in General Journal on repossession.
Question # 4:
2007 Regular (Advanced & Cost Accounting) UOK
Irfan and Company sells refrigerators at 20% above cost and keeps accounts for sales by the
installment method. In 2007, repossessions were made on unpaid installment contract balances
of Rs.60,000. Repossessed units had a total resale value of Rs.54,000. The company records such
repossessions at a value that will permit the normal margin on sales.
REQUIRED
Give the entry to summarize the repossessions for 2007.
Question # 5:
Rehan Co. Ltd. reports profits on installment basis. It uses perpetual inventory system, for
recording merchandise. The transactions for the year ended Dec. 31, 2007 are as under:
1. Purchased merchandise on account for Rs.360,000.
2. Sales on installment basis Rs.450,000.
3. Cost of installment sales Rs.250,000.
4. Collection of installment accounts receivable Rs.300,000.
5. Payment of accounts payable Rs.155,000.
6. Repossession of goods sold on installment basis:
Installment account receivable cancelled Rs.22,000.
Repossession of goods valued Rs.11,000.
7. Expenses incurred but not paid Rs.8,000.
REQUIRED
Give entries in General Journal to record the above transactions including adjusting and closing
entries.
Sameer Hussain
Page 118
Installment Sales
Chapter # 7
Question # 6:
Irfan Limited sells merchandise on installment basis. Data relating to the inventory, purchases
and sales of equipment during the year 2010 are as follows:
Inventory of equipment January 1, 2010
Rs. 150,000
Purchases of equipment on account
500,000
Sales of equipment during the year
750,000
Cash collection from customers
250,000
Inventory of equipment December 31, 2010
200,000
REQUIRED
Give journal entries in the General Journal to record the above transactions including adjusting
and closing entries.
Question # 7:
The Kabir Company sells merchandise on installment basis. Data relating to the inventory,
purchases and sales of equipment during the year 1996 are as follows:
Inventory of equipment January 1, 1996
Rs. 100,000
Purchases of equipment on account
500,000
Sales of equipment during the year
750,000
450,000
Inventory of equipment December 31, 1996
150,000
REQUIRED
Give journal entries in the General Journal to record the above transactions including adjusting
and closing entries.
Question # 8:
Pak Traders sell merchandise in installment basis. The following data relate to their operations
for the year 2012:
Merchandise inventory (1 1 2012)
Rs. 16,250
Purchases on account
44,250
Installment sales
75,000
25,000
Merchandise inventory (31 12 2012)
15,500
REQUIRED
(i) Find out the cost of installment sales.
(ii) Give journal entries under installment method including adjusting entry/entries, using
perpetual system.
Question # 9:
2004 Private (Advanced Accounting) UOK
Nizam Sons use perpetual inventory system for recording merchandise. Summarized data for
the year 2004 are as under:
1. Sales made on installment basis
500,000.
2. Collecting from installment A/R
200,000.
3. Operating expenses paid
32,000.
4. Operating expense payable
3,000.
400,000.
6. Installment accounts receivable cancelled
30,000.
7. Repossessed goods valued at
22,000.
REQUIRED
(a) Calculate gross profit rate.
(b) Find out loss/gain on repossession.
(c) Pass journal entries for recording the above transactions including adjusting and closing
entries.
Page 119
Sameer Hussain
Installment Sales
Chapter # 7
Question # 10:
Umar & Sons Ltd. uses perpetual inventory system for recording merchandise and installment
method for recognizing profit. Their transactions for the year ended June 30, 2005 were as
under:
1. Sales on installment basis
Rs.450,000
315,000
3. Purchased merchandise on account for
500,000
150,000
5. Payment of accounts payable
200,000
6. Expenses paid
4,000
7. Installment accounts receivable cancelled
25,000
8. Repossessed merchandise was valued
16,000
REQUIRED
Record the above transactions in General Journal giving adjusting and closing entries.
Question # 11:
Mulla & Co. uses perpetual inventory system for recording merchandise and installment method
for recognizing profit. Their transactions for the year ended June 30, 1993 were as under:
1. Purchased merchandise on account
Rs.500,000
2. Purchased merchandise for cash
150,000
3. Sales on installment basis
600,000
220,000
5. Payment to creditors
250,000
6. Cost of merchandise sold on installment
450,000
7. Paid expenses
14,000
8. Repossession of merchandise sold on installment basis:
o Installment accounts receivable cancelled
40,000
o Value of repossessed goods
20,000
REQUIRED
Record the above transactions in General Journal giving adjusting and closing entries.
Question # 12:
Ahmad Installment Sales Company uses perpetual inventory system for recording merchandise
and installment method for recognizing profit. The following transactions were incurred for the
year ended June 30, 1992:
Rs.300,000
2. Cash collection during the year
200,000
225,000
4. Office expenses paid
10,000
5. General expenses paid
5,000
REQUIRED
(a) Give the journal entries that would be made to record the above transactions along with
adjusting and closing entries for the year ended June 30, 1992.
(b) Prepare Income Statement and Balance Sheet on June 30, 1992.
(c) Show how the relevant accounts will be reported in balance sheet on June 30, 1992.
Sameer Hussain
Page 120
Installment Sales
Chapter # 7
Question # 13:
2006 Regular (Advanced Accounting) UOK
Jadid Homes sells bedroom furniture on installment basis. Following information pertains to the
accounting records for three years of operations:
2003
2004
2005
Installment sales
150,000
200,000
250,000
100,000
150,000
200,000
Selling & administrative expenses
50,000
60,000
80,000
Collection from Customers:
Installment sales 2003
80,000
40,000
20,000
--100,000
80,000
----150,000
The firm uses installment method of recognizing revenue.
REQUIRED
(a) Compute the following for each year:
1. Deferred gross profit
2. Rate of deferred gross profit
3. Realized gross profit
4. Net profit or loss
(b) Record collection of cash and realize gross profit for each year separately in the General
Journal of Jadid Homes.
Question # 14:
Rashid Company sells all merchandise on installment basis. Following information obtained
from the accounting records for first three years of operations:
Year 1
Year 2
Year 3
Installment sales
180,000
240,000
200,000
108,000
139,200
112,000
Operating expenses
50,000
55,000
54,000
Collection from Customers:
Installment sales of year 1
75,000
60,000
40,000
--100,000
80,000
----85,000
REQUIRED
(a) Determine the amount of net profit or net loss that would have been reported in each of
the three years if the installment method of recognizing revenue had been employed.
(b) Record collection of cash and realize gross profit in each of the three years.
Question # 15:
The Ghareeb Nawaz Co. sells merchandise on installment basis. It uses perpetual system for
recording merchandise and installment method for recognizing profits. The data related to
installments sales of the Co. for the years 2010 and 2011 are:
2010
2011
Installment sales
360,000
480,000
60% of sales
65% of sales
Cash collection of accounts receivable 2010 installment sales
200,000
140,000
Cash collection of accounts receivable 2011 installment sales
242,000
REQUIRED
(i) Give the necessary journal entries including those for adjustment recording the above
data for 2010 and 2011 respectively on the books of the company.
(ii) Assume that the customer default on installment sales of 2010 after cash collection in
2011 and the merchandise was repossessed and was valued at Rs.5,000. Give journal
entries for recoding the default.
Page 121
Sameer Hussain
Installment Sales
Chapter # 7
Question # 16:
Sarwar Associates sell merchandise on installment basis. The transactions for the year ended
December 31, 2009 are as under, with merchandise inventory on January 1, 2009 Rs.110,000.
1. Purchase of goods on Rs.750,000 of which Rs.225,000 was for cash.
2. Collection of installment accounts receivable were as under:
2007
Rs.70,000
2008
120,000
2009
300,000
3. Total sales on installment basis for the year Rs.650,000.
4. Accounts payables of Rs.400,000 were settled through bank.
5. Installment accounts receivable of 2007 were cancelled amounted to Rs.20,000 and the
repossessed merchandise was assigned a resale value of Rs.14,700.
6. Expenses totaled Rs.40,000 of which expenses amounting to Rs.25,000 were paid.
Ending inventory of merchandise was valued Rs.340,000.
Gross profit rate in 2007 was 30% and in 2008 25%.
REQUIRED
Record all above transactions including adjusting and closing entries under perpetual system.
Question # 17:
2002 Regular & Private (Advanced Accounting) UOK
Umair & Company sells merchandise on installment basis. The transactions for the year ended
December 31, 2001 are as under:1. Merchandise inventory Jan. 1, 2001
150,000.
400,000.
200,000.
4. Sold merchandise on installment basis
800,000.
5. Collection of installment accounts receivable of 2001
300,000.
6. Collection of installment accounts receivable 1999
50,000.
7. Collection of installment accounts receivable of 2000
100,000.
8. Payment made to creditors
250,000.
9. Installment accounts receivable of 1999 in the amount of Rs.8,000 was
cancelled because of default but the merchandise could not be repossessed.
10. Expenses paid
25,000.
11. Merchandise inventory Dec. 31, 2001
270,000.
Note: Gross profit rate 1999 42%, 2000 44%.
REQUIRED
Record the above transactions in the general journal and also give adjusting and closing entries
at December 31, 2001 assuming the company follows the perpetual inventory system.
Question # 18:
Sana Company Ltd. sells merchandise on installment basis. The transactions for the year ended
December 31, 2011 are as under:1. Merchandise inventory Jan. 1, 2011
Rs.150,000.
400,000.
200,000.
4. Sold merchandise on installment basis
800,000.
5. Collection of installment accounts receivable (2011)
300,000.
50,000.
100,000.
8. Payment made to creditors
250,000.
9. Installment accounts receivable of 2009 in the amount of Rs.8,000 was
cancelled because of default but the merchandise could not be repossessed.
10. Expenses paid
25,000.
11. Merchandise inventory Dec. 31, 2011
270,000.
Sameer Hussain
Page 122
Installment Sales
Chapter # 7
Note: Gross profit rate 2009 42%, 2010 44%.
REQUIRED
Record the above transactions in the general journal and also give adjusting and closing entries
at December 31, 2011 assuming the company follows the perpetual inventory system.
Question # 19:
2001 Regular & Private (Advanced & Cost Accounting) UOK
A-One Co. follows the perpetual inventory system and FIFO method for inventory valuation and
closes its book twice in a year at June 30, and December 31.
Balances at January 1, 2001
Installment accounts receivables 1999
Rs.75,000
25,000
150,000
45,000
At June 30, 2001
Installment sales made at 25% above cost during the 6 month period
Rs.450,000
An installment accounts receivable 1999 cancelled
5,000
Repossessed merchandise was assigned a value of Rs.
2,500
30,000
45,000
175,000
REQUIRED
1. Compute gross profit rates of the installment sales originated in 1999 and 2000.
2. Prepare a statement showing collection of installment accounts receivables of 1999, 2000
and 2001 at June 30, 2001.
3. Give all necessary entries under installment method for recording transactions concerning
installment sales including an adjusting entry for recording realized gross profit.
4. Record repossession without recognizing loss or gain.
Question # 20:
Alam Co. follows the perpetual inventory system and closes its books twice in a year at June 30,
and December 31.
Balance at January 1, 2003:
Installment A/Receivable 2002
Rs.175,000
Rs.75,000
At June 30, 2003:
Installment sales made at 40% gross profit during the 6 months period
Rs.450,000
An installment A/Receivable 2002 cancelled
5,000
Repossesses merchandise was assigned a value of
2,500
45,000
175,000
REQUIRED
(1) Compute gross profit rate of the installment sales originated in 2002.
(2) Show collection of installment A/Receivable of 2002 and 2003, at June 30, 2003.
(3) Give all necessary entries under installment method for recording transactions concerning
installment sales including an adjusting entry for recording realized gross profit.
(4) Record repossession recognizing loss or gain.
Question # 21:
2004 Regular & Private (Advanced Accounting) UOK
Ideal Sales Company sells goods on installment basis. Its balances on Dec. 31, 2001 were:
Rs.14,000
Rs.4,000
Page 123
Sameer Hussain
Installment Sales
Chapter # 7
Summary of the transactions for the year 2002 is as follows:
(a) Installment sales Rs.49,000.
(b) Collection of installment of current year Rs.42,000.
(c) Collection of installment of 2001 Rs.5,600.
(d) Cancellation of installment contract 2001 Rs.2,100.
(e) Repossessed goods valued at Rs.1,350.
In both years the goods have been sold at 40% above cost.
REQUIRED
1. Entries to record the transactions for 2002.
2. Adjusting and closing entries for 2002.
3. Show how the relevant account will be reported in balance sheet on Dec. 31, 2002.
Question # 22:
The following balances are taken from the pre-closing trial balance of Hassan Co. as of
December 31, 2007:
1. Installment accounts receivable 2006
Rs.80,000
2. Installment accounts receivable 2007
120,000
200,000
140,000
5. Unrealized gross profit 2006
80,000
REQUIRED
(1) Prepare all entries for the year ended December 31, 2007 adjusting and closing as well,
assuming that rate of gross profit on installment sales of 2006 was 25%. Show all
computations.
(2) On January 10, 2008 a customer defaulted on his payment. Give journal entries for
repossession with the help of the following information:
1. Original sale on installment
Rs.2,000
2. Date of sale
12 Aug 2006
3. Collection up to date
Rs.1,500
4. Estimated market value of repossessed merchandise
Rs.600
Question # 23:
Al-Fazal Manufacturing Co. sells its finished products for cash, on credit and on installment.
Accidently, some water was spread on the accounting records of installment sales and some of
the pages were smeared. After drying, only the following portion is readable:
January 1, 1999
Rs.80,000
Rs.32,000
December 31, 1999
(Before Adjustment)
Rs.20,000
Rs.30,000
Rs.86,000
Rs.90,000
During 1999, installment sales were made at 45% gross profit rate.
REQUIRED
1. Reconstruct in general journal form as many summary entries as possible for 1999
under installment method including adjusting and closing entries. Show necessary
supporting computations.
2. Give an entry to record repossession assuming that the repossessed merchandise was
recorded at its book value.
Sameer Hussain
Page 124
Installment Sales
Chapter # 7
Question # 24:
The selected balances of Akbar Installment Sales Co. are as follows:
1997Jan. 1 1997Dec. 31
120,000
--Installment accounts receivable 1996
380,000
180,000
--450,000
30,000
25,000
114,000
114,000
Installment sales
--600,000
--408,000
Repossessed merchandise
--16,000
Installment accounts receivable1995 cancelled on repossession
--20,000
REQUIRED
a) Gross profit percentage for each year.
b) Collection of installment accounts receivable of each year during 1997.
c) Gross profit realized during 1997.
d) General Journal entries made during 1997 on repossession.
e) General Journal entries to record the realized gross profit.
Question # 25:
The following are the selected assets and equities of Gulbahar Installment Co. on Dec. 31, 1991:
Assets
Equities
Cash
12,000 Accounts Payable
2,000
Merchandise Inventory
8,000 Deferred Gross Profit 1991
4,000
Installment Receivable 1991
20,000 Capital
34,000
40,000 Total Equities
40,000
Transactions During 1992 are as under:
Merchandise purchased on accounts
32,000
Installment sales
25,000
Collection from installment accounts receivable 1991
10,000
Collection from installment accounts receivable 1992
20,000
Payment of accounts payable
25,000
Installment accounts receivable 1991 defaulted of
8,000
Merchandise repossessed at fair market value
2,000
Operating expenses paid
1,000
Merchandise inventory-ending (including repossessed merchandise)
12,000
Company uses perpetual inventory system (FIFO basis) for recording merchandise and
installment method for recognizing profits.
REQUIRED:
Give entries in General Journal to record the above data, including adjusting and closing entries
for the year 1992.
Question # 26:
Naseem & Company sells merchandise on installment basis. The summary of transactions for
the year ended December 31, 1985 and December 31, 1986 are as follows:
1985
1986
Installment sales
500,000
750,000
Collection in respect of 1985 installment sales
300,000
150,000
Collection in respect of 1986 installment sales
--450,000
Purchase on account
410,000
500,000
Selling & general expenses
75,000
170,000
Payment of accounts payable
250,000
500,000
Merchandise inventory ending
100,000
150,000
Page 125
Sameer Hussain
Installment Sales
Chapter # 7
REQUIRED:
Give journal entries for the years ended December 31, 1985 and 1986 including adjusting
journal entries.
Question # 27:
The following are transactions for 1998 of Lahore Installment Sales Company which follows the
perpetual system and FIFO method for inventory valuation had 50 machines @ Rs.580 per
machine in beginning inventory:
(a) Purchased 300 machines at the rate of Rs.600/- per machine.
(b) Sold 250 machines at the rate of Rs.1,000/- per machine.
(c) Received down payment at the rate of Rs.200/- per machine on 250 machines.
(d) Received 997 installments at the rate of Rs.100/- per installment.
(e) Repossesses one machine from a customer, who had paid only down payment and one
installment.
REQUIRED
General journal entries including adjusting entry supported by proper computations. Also
determine ending inventory of merchandise.
Question # 28:
Smart Home Company sells local vacuum cleaners on installment basis. The company uses
periodic system and first in first out method for inventory valuation. The company has 100
vacuum cleaners of Rs.600 each in the beginning inventory. The company completed the
following transactions during the year:
(a) Purchased 300 vacuum cleaners at Rs.650 each.
(b) Sold 250 vacuum cleaners at Rs.1,000 each.
(c) Collected down payment at Rs.200 on each vacuum cleaner.
(d) The balance to be collected in 4 equal quarterly installments of Rs.200 each.
(e) All installments were collected in full except a customer who failed to pay the last
installment.
(f) The equipment was repossessed. The value of repossessed equipment was Rs.100.
REQUIRED
(a) General journal entries including adjusting.
(b) Cost of installment sales.
(c) Gain or loss on repossession.
(d) Gross profit realized.
Question # 29:
The following transactions relate to Al-Abid Co. for 2006 which follows the perpetual inventory
system and FIFO method for valuation of inventory.
Opening inventory consist of 50 machines @ Rs.560 per machine. They completed the following
transactions:
(1) Purchased 350 machines @ Rs.600 per machine on account.
(2) Sold 250 machines @ Rs.1,000 each on installments.
(3) Received down payment @ Rs.200 per machine on all the sold machines.
(4) Received 996 installments @ Rs.100 per installment.
(5) Repossessed one machine from a customer who had paid only down payment having
market value of Rs.500.
REQUIRED
Journal entries including adjusting and closing entries. Show all computations.
Sameer Hussain
Page 126
Installment Sales
Chapter # 7
Question # 30:
Mifta Installment Company purchased 15 computers from Alam & Bilal Traders @ Rs.33,600
each on credit. The company sold 7 computers on installment @ Rs.42,000 each on September
1, 2008. The terms of installment sales were to pay 25% on each computer as a down payment
and the remaining amounts to be collected in 15 monthly installments starting from October 1,
2008.
All installments collected on the first day of each month. Three of the computer holders
defaulted to pay the installments after the payment of 5th installment and company repossessed
the computers which have the fair market value of Rs.17,000 each computer.
Mifta Installment Company closes its accounting year on June 30 each year.
REQUIRED
Compute the following:
1. Amount of installment sales.
2. Amount of down payment received.
3. Monthly installment amount of each computer.
4. Unrealized (deferred) gross profit.
5. Rate of Unrealized (deferred) gross profit.
6. Total amount of installment accounts receivable cancelled.
7. Book value of repossessed merchandise.
8. Gain or loss on repossession.
9. Total amount collected during the period.
10. Amount of realized gross profit.
Question # 31:
On January 1, 1997 the X.Y. Co. sold a car for Rs.60,000 on installment basis Rs.10,000 was
received as down payment and balance amount in five quarterly installments including interest.
The rate of interest charge on unpaid balance is 6% per annum. The cost of the car was
Rs.45,000. All payments were dully received. The accounting year ends on December 31, each
year.
REQUIRED
Give journal entries including adjusting and closing entries for the year 1997 only. Also give
necessary computations.
Question # 32:
On July 1, 1993, Shaheen Autos sold 10 Suzuki cars on installment basis at Rs.135,000 per car,
the cost being Rs.114,750 per car. The terms of sale were:
a) Rs.35,000 per car should be paid at the time of signing the agreement.
b) The balance should be paid in 20 quarterly of Rs.5,000 per car.
c) Interest at 8% should be paid on the unpaid balances, and be paid along with the
installment amount.
d) Ownership would be transferred on the payment of the final installment.
REQUIRED
Make necessary journal entries including adjusting and closing of entries in the books of
Shaheen Autos in respect of the above transactions for the year ended December 31, 1993
assuming that Shaheen Autos closes its books on December 31, every year. Shaheen Autos
follows installment method for recognizing profits.
Page 127
Sameer Hussain
Installment Sales
Chapter # 7
Question # 33:
Hasnain & Brothers follows installment method for recognizing profits & closes its accounting
year on June 30, every year.
On September 12, 2010 Hasnain & Brothers purchased 30 computers from Tauseef Computers
for Rs.36,000 each on credit.
On October 1, 2010 Hasnain & Brothers sold 25 computers @ Rs.45,000 each. The customers
paid Rs.20,000 per computer as down payment of October 1, 2010 and agreed to pay the
balance in 8 equal quarterly installments (The first quarter started from October 1, 2010). The
ownership would be transferred on the payment of the final installment. The installments
received on the last day of each quarter.
REQUIRED
Prepare journal entries including adjusting and closing to record the above transactions only for
the year ended June 30, 2011.
Question # 34:
On January 1, 2010 Star Installment Co. has 5 computers in stock costing Rs.20,000 each. On
January 6, 2010 Co. purchased 7 computers for Rs.175,000 on account from M/S Sun Computer
House. On March 20, 2010 Star Installment Co. sold 9 computers for Rs.270,000. The customers
paid Rs.3,000 for each computer as down payment on the same date and rest will be paid in 10
equal quarterly installments. The agreement shows that the amount of installment will be
received on the last day of each quarter and buyer will pay 6% interest on unpaid balance. The
first installment due on June 30, 2010. Star Installment Co. uses FIFO method of inventory
valuation and Co.s accounting year ends on December 31, each year.
REQUIRED
Prepare journal entries including adjusting and closing for the year 2010 only.
Question # 35:
City Cars deals with two brands of fuel economy local cars namely GL and XL. The selling price
of GL cars is Rs.450,000 each while the XL cars are sold for Rs.400,000. The selling price
includes a profit margin of 5 percent. A down payment of 20 percent is collected on each car.
The balance is collected on 10 monthly installments of equal amounts.
The business completed the following transactions during the year:
Purchased 10 units of GL cars and 15 units of XL cars on account from New Age Motors
Company.
Sold 10 units of each type of cars.
The down payment and all installments were collected in full by cheque except the following:
(i) A customer failed to pay last three installments due on the XL cars he had purchased.
The vehicle was fortified and assigned a value of Rs.150,000. The car was taken by the
owner for his personal use.
(ii) A cheque amounting to Rs.72,000 received from a customer who bought a GL car was
dishonored.
City Cars incurred and paid the following expenses during the year:
Selling expenses
30,000
Administrative expense
70,000
REQUIRED
(a) General Journal entries in City Cars book (adjusting and closing are not required).
(b) Cost of installment sales for each brand separately.
(c) Gross profit realized on each brand of cars.
(d) Net profit of City Cars for the year.
Sameer Hussain
Page 128
Installment Sales
Chapter # 7
Question # 36:
Kamran Electric Companys deals in the sales of generators on installment basis. The company
has two plans which are summarized below:
Explanation
Plan A
Plan B
Down payment for each
10% of the sales price
Rs.7,000
generator
No. of installments
15 equal monthly
5 equal quarterly installments
installments
Rate of interest on unpaid
Nil
6% per annum
balance
Installment amount due
At the start of the each
At the end of each month
month
Kamran Company had inventory of 20 generators 2500KV costing Rs.800,000.
Under Plan A, company sold 6 generators to Sardar Industries on October 5, 2009 at a profit of
35% on cost. Sardar Industries will start to pay installments from November, 2009.
Under Plan B, company sold 5 generators to Shahani & Sons for Rs.50,000 each on June 28,
2009. Quarter starts from July 1, 2009.
REQUIRED
Prepare dated journal and adjusting entries, separately under each plan for the year 2009 only.
Question # 37:
The following trial balance has been prepared from the ledger of M/S. Rehman & Co. traders
dealing in installment sales. Taking the facts and figures from the trial balance you are asked to:
(c) Find the gross profit percentage on installment sales in 1989, 1990 and 1991.
(d) Prepare Income Statement and Balance Sheet for the year ended on Dec. 31, 1991.
(e) Pass the adjusting and closing entries.
M/S. REHMAN & CO.
TRIAL BALANCE
AS ON DECEMBER 31, 1991
Cash
Rs.45,000
165,000
36,000
9,000
Accounts receivable
81,000
Inventory December 31, 1990
156,000
Land and building
40,000
Furniture and fixture
20,000
Accounts payable
150,000
108,000
24,180
Share capital
300,000
Profit and loss account balance
217,920
Sales
345,000
Installment sales
960,000
Purchases
998,100
720,000
720,000
Operating expenses
555,000
Total
2,825,100
2,825,100
Page 129
Sameer Hussain
Installment Sales
Chapter # 7
Other Information:
Inventory of merchandise on December 31, 1991 was Rs.165,000. The following account
balances were found in the post-closing trial balance prepared on January 1, 1991.
360,000
78,000
108,000
24,180
Question # 38:
The Daniyal Electric Products Company manufactures table fans. It is a practice of the company
to sell 30% of its production on installment basis. The company recognizes profit on sales on the
basis of cash collected from customers. The following are the data for three years:
Years
Profit
Installment Receivable on Collection During Installment Receivable on
January 1, 2010
2010
December 31, 2010
2008
44%
Rs.80,000
Rs.80,000
--2009
42%
Rs.165,000
Rs.75,000
Rs.90,000
2010
40%
Rs.150,000
Rs.300,000
REQUIRED
Prepare all journal entries for 2010 from the data above, including those required for the
recognition of gross profit at the end of year.
Question # 39:
Khan and Company reports profits on installment basis. It uses perpetual inventory system for
recording merchandise and installment method for recognizing profits. Transactions during
2011 are summarized below:
a) Cost of installment sales Rs.400,000.
b) Installment accounts receivable (ending) 2011 Rs.300,000.
c) Installment accounts receivable cancelled 2010 Rs.40,000.
d) Merchandise repossessed at book value which is Rs.32,000.
e) Unrealized gross profit (beginning) 2010 Rs.30,000.
f) Installment accounts receivable (ending) 2010 Rs.20,000.
g) Unrealized gross profit percentage remains constant in both the years.
REQUIRED
a) Give the necessary General Journal entries including adjusting entries. Show necessary
computations.
b) Prepare partial balance sheet as on 31 December 2011 showing installment accounts
receivable and unrealized gross profit.
Sameer Hussain
Page 130

Installment Sales (1) aDVAC

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Installment Sales (1) aDVAC

Загружено:

Авторское право:

Доступные форматы

Chapter # 7

SYLLABUS ACCORDING TO UNIVERSITY OF KARACHI:

Accounting for installment sales under Perpetual Inventory System.

WHAT THE EXAMINER USUALLY ASK?

COST OF INSTALLMENT SALES

UNREALIZED GROSS PROFIT

REALIZED GROSS PROFIT

COMPUTATION OF COST OF INSTALLMENT SALES:

COMPUTATION OF UNREALIZED GROSS PROFIT (D.G.P.):

Installment sales Cost of installment sales

COMPUTATION OF UNREALIZED GROSS PROFIT RATE (D.G.P. %):

Unrealized gross profit

COMPUTATION OF CASH COLLECTION:

Cash collection (previous year) =

Installment sales Installment accounts

COMPUTATION OF REALIZED GROSS PROFIT (R.G.P.):

Cash collection x Unrealized gross profit rate

COMPUTATION OF INSTALLMENT SALES / INSTALLMENT ACCOUNTS

Unrealized gross profit (D.G.P.)

COMPUTATION OF LOSS ON DEFAULT:

COMPUTATION OF GAIN OR LOSS ON REPOSSESSION:

GENERAL ENTRIES UNDER PERPETUAL SYSTEM:

o Purchased Merchandise on Account:

DR. (with amount of expenses paid)

ADJUSTING ENTRIES UNDER PERPETUAL SYSTEM:

o Recording Cost of Goods Sold:

CLOSING ENTRIES UNDER PERPETUAL SYSTEM:

Unrealized Gross Profit Rate

Cost of Installment Sales

Merchandise Inventory (Beginning)

Computation of Unrealized Gross Profit (DGP):

Computation of Realized Gross Profit (RGP):

(Different Years Data)

The selected balances of ABC Installment Sales Co. are as follows:

Computation of Unrealized Gross Profit (DGP) (2007):

Unrealized gross profit (Beg)

Unrealized gross profit (Beg)

Installment A/R (Beg) Installment A/R (End)

Cash collection (2005) =

Installment A/R (Beg) Installment A/R (End) Installment

Cash collection (2005) =

Computation of Realized Gross Profit:

Computation of Gain or Loss on Repossession:

ABC INSTALLMENT SALES CO.

(Data Based on Units)

Computation of Merchandise Inventory Ending:

Units sold x Selling price per unit

Computation of Unrealized Gross Profit:

Computation of Cash Collection:

Computation of Realized Gross Profit:

XYZ INSTALLMENT SALES COMPANY

Computation of Unrealized Gross Profit:

Unrealized gross profit (Beg)

Computation of Cash Collection:

Installment A/R (Beg) Installment A/R (End)

Computation of Realized Gross Profit:

Computation of Retained Earnings Ending Balance:

Imran & Co.

Imran & Co.

Вам также может понравиться