4. (Installment-Sales Method Calculations, Entries) Mandarin Partners appropriately uses the

installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2010 and 2011.

2010 2011

Installment sales $300,000 $750,000

Cost of installment sales 255,000 660,000

Cash collections on 2010 sales 70,000 201,000

Cash collections on 2011 sales 0 216,000

Instructions

(a) Compute the amount of realized gross profit recognized in each year (check your answer: gross profit recognized in 2011 = 56,070).

(b) Prepare all journal entries required in 2011.