1.Dipolog Company sells appliances on the installment basis. Below are information for the past three years:

2008 2007 2006

Installment sales ------------------ P750,000 P600,000 P400,000

Cost of sales ----------------------- 450,000 375,000 260,000

Collections on:

2008 installment sales --- 275,000

2007 installment sales --- 180,000 240,000

2006 installment sales --- 125,000 120,000 150,000

Repossessions on defaulted accounts included one made on a 2008 sale for which the unpaid balance amounted to P5,000. The depreciated values of the appliance repossesed was P2,500.

The realized gross profit in 2008 on collections of 2008 installment sales was:

a. P108,000 c. P221,250

b. 110,000 d. 221,600

2. TT Company, which began business on January 1, 2008, appropriately uses the installment sales method of accounting. The following data are available for 2008:

Installment accounts receivable, 12/31/08 --------------------- P200,000

Deferred gross profit, 12/31/08 (before recognition

of realized gross profit) ---------------------------------- 140,000

Gross Profit on sales ---------------------------------------------- 40%

The cash collections and the realized gross profit on installment sales for the year ended December 31, 2008 should be

Cash collections Realized gross profit

a. P100,000 P80,000

b. 100,000 60,000

c. 150,000 80,000

d. 150,000 60,000