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1. B (8;392 G)
2. B (7;392 D)
3. D (92;230 D)
4. B (1;197 D)

Realized gross profit on instalment sales in 2016: Collections x Gross profit rate %
2015 sales: P500,000 x 30% ……………………………………………………P150,000
2016 sales: P600,000 x 40% …………………………………………………… 240,000
P390,000

5. B (4;394 G)

Sales P1,000,000

Cost of installment sales 700,000

Deferred gross profit P 300,000

Less: Deferred gross profit, end

Installment accounts receivables, 12/31

(1,000,000-400,000) P 600,000

Gross profit rate (300,000 1,000,000) X 30% 180,000

Realized gross profit P 120,000

Operating expenses 80,000

Operating income P 40,000

Interest and financing charges 100,000

Net income P 140,000

6. C (2;4 link)

Installment account receivable, 12/31/13 P200,000


Gross profit rate 40%
Deferred gross profit, December 31,2013 P 80,000
Average

1. D (17;203 D)

Instalment accounts receivable, December 31, 2016:


Deferred gross profit, December 31, 2016/Gross profit rate
2015 sales: P120,000 / 30%............................................................. P 400,000
2016 sales: P440,000 / 40%............................................................ 1,100,000
Instalment accounts receivable, December 31, 2016……………………………… P1,500,000

2. C (27;208 D)

Trade-in allowance…………………………………………………………………….. P 43,200


Less: market value of trade-in merchandise
Estimated resale price after reconditioning………. P36,000
Less: Reconditioning costs………………………………... 1,800
Normal profit (15% x P36,000)…………………. 5,400 28,800
Over allowance P 14,400

Instalment sales............................................................ P 122,000


Less: over allowance…………………………………………………. 14,400
Adjusted instalment sales…………………………………………. P 108,000
Less” cost of instalment sales…………………………………… 86,400
Gross profit………………………………………………………………… P 21,600

Gross profit rate (P21,600 / P108,000)………………………………………………….. 20%

Realized Gross profit:


Down payment…………………………………………………………………………. P 7,200
Trade-in (at market value)………………………………………………………… 28,800
Instalment Collections:
(P108,000 – P28,800 – P7,200) / 10 x 3 months………… 21,600*
Total collections in 2016……………………………………………………………………….. P 57,600
Multiply by: Gross profit ratio……………………………………………………………….. 20%
P 11,520

* or (P122,400 – P7,200 – P43,200) / 10 x 3 months


3. B (14;8 link)

(1) Total realized gross profit

2011 2012 2013


Deferred gross profit before adjustment P10,500 P28,900 P96,000
Deferred gross profit, end:
2011 sales (P12,000 x 35%) 4,200
2012 sales (P40,000 x 34%) 13,600
2011 sales (P130,000 x 32%) 41,600
Realized gross profit, 12/31/13 P 6,300 P15,300 P54,400
Total (P76,000)

(2) Total collections in 2013


2011 2012 2013

Installment accounts receivable, beg


2011 sales (P10,500/35%) P30,000
2012 sales (P28,900/34%) 85,000
2011 sales (P96,000/32%) P300,000
Installment accounts receivable, end 12,000 40,000 130,000
Collections during 2013 P18,000 P45,000 P170,000
Total (P233,000)

4. B (29;14 link)

Fair value of repossessed merchandise P6,800


Unrecovered Cost:
Unpaid balance:
Sales 16,000
Collections:
Downpayment 3,200
Installment 3,200 6,400 9,600
Deferred gross profit (9,600 x 40%) 3,840 5,760
Gain on repossession P1,040
5. A (22;402 G)

Regular sales P1,575,000


Cost of regular sales 1,050,000
Gross profit on regular sales 525,000
Realized gross profit on installment sales:
Installment sales (1,093,750 x 240%) 2,625,000
Installment accounts receivable-12/31/08 1,575,000
Collections 1,050,000
Gross profit on rate on sales 140/240 612,500
Total realized gross profit 1,137,500
Operating expenses (1,137,500 x 70%) 796,250
Net income P 341,250
Hard

1. C (49;24 link)

Total realized gross profit (Sch.1) P157,156


Loss on repossession (Sch.2) (1,000)
Total realized gross profit loss on repossession 156,156
Operating expenses 96,000
Net income, Dec. 31,2013 P60,156

Schedule 1 – realized gross profit


2011 2012 2013
Sales Sales Sales
Inst. Contract receivable, 1/1/13 P110,000 P250,000 P420,000
Inst. Contract receivable, 21/31/13 (28,000) (92,000) (238,000)
Accounts written off (9,000) (2,800) –
Defaulted accounts (5,000) - -
Collections 68,000 155,200 182,000
Gross profit rate (GP/IS) 40% 38% 39%
Realized gross profit (P157,156) P27,200 P58,976 P70,980

Schedule 2 - loss o repossession:

Appraised value of repossessed merchandise P2,400


Less: reconditioning cots 400
Actual value at time of repossession 2,000
Less: unrecovered cost
Unpaid balance 5,000
Deferred gross profit (P5,000 x 40%) 2,000 3,000
Loss on repossession P(1,000)

2. B (38;213 D)
Dates (1) (2) (3) (4)
Collection 1% x (4) (1)-(2) (4)-(3)
Interest Principal Unpaid Balance
9/30/15 P3,600,000
9/30/15 P1,600,000 P-0- P1,600,000 2,000,000
10/31/15 220,000 20,000 *200,000 1,800,000
11/30/15 218,000 18,000 200,000 1,600,000
12/31/15 216,000 16,000 200,000 1,400,000
1/31/16 214,000 14,000 200,000 1,200,000

*monthly collections as to principal


3. C (39;213 D)

Dates (1) (2) (3) (4)


Collection 1% x (4) (1)-(2) (4)-(3)
Interest Principal Unpaid Balance
9/30/15 P3,600,000
9/30/15 P1,600,000 P-0- P1,600,000 2,000,000
10/31/15 211,164.15 20,000 191,164.15 1,808,835.85
11/30/15 211,164.15 18,088.36 193,075.79 1,615,760.06
12/31/15 211,164.15 16,157.60 195,006.65 1,420,753.51
1/31/16 211,164.15 14,207.54 196,956.61 1,223,796.90

4. D (40;213 D)

Average amount owed, (P2,000,000 + P200,0000 / 2 = P1,100,000


Interest paid: P3,600,000 x 12% x 10/12 = P360,000
Interest cost for 10-month period = P360,000 / P1,100,000 = 32.73%
Interest rate per year = 32.75% / (10/12) = 39.28%

5. (46;23 link)

Deferred gross profit, before adjustment P38,000


Less: deferred gross profit applicable to
Uncollected installment accounts:
2012: P16,250 x 30%/130% P3,750
2013:P90,000 x 25% 22,500 26,250
Realized gross profit P11,750
Less: Expenses 1,500
Net income on installment sales P10,250

Link:
https://drive.google.com/file/d/0B-oKl0zBZhKbWVhvVDV5d1dLRzg/view

D:
Practical accounting 2 by Dayag

G:
Advanced Accounting v1 by Guerrero