Exercise 5-30 Journal entries; point of delivery, installment sales, and cost recovery methods [Appendix] On July 1, 2016, the Foster Company sold inventory to the Slate Corporation for $130,000. Terms of the sale called for a down payment of $32,500 and three annual installments of $32,500 due on each July 1, beginning July 1, 2017. Each installment also will include interest on the unpaid balance applying an appropriate interest rate. The inventory cost Foster $39,000. The company uses the perpetual inventory system. Required: 1. Prepare the necessary journal entries for 2016 and 2017 using point of delivery revenue recognition. Ignore interest charges. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet 1 2 3 4 > Record the installment sale of $130,000 using the point of delivery method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Journal entry worksheet 1 2 2 3 4 Record the $39,000 cost of the installment sale using the point of delivery method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Journal entry worksheet Record the cash collection of $32,500 using the point of delivery method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Journal entry worksheet Record the installment sale of $130,000 using the installment sales method when the inventory had a cost of $39,000. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Record entry Clear entry View general journal Journal entry worksheet Record the cash collection of $32,500 using the installment sales method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Journal entry worksheet Record the 2016 recognized gross profit using the installment sales method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Record entry Clear entry View general journal Journal entry worksheet Record the installment sale of $130,000 using the cost recovery method when the inventory had a cost of $39,000. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 3 4 5 Record the cash collection of $32,500 using the cost recovery method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2016 Journal entry worksheet Record the 2016 recognized gross profit using the cost recovery method. Note: Enter debits before credits. Date General Journal Debit Credit July 01, 2016 Journal entry worksheet 1 N 3 3 4 5 > Record the cash collection of $32,500 using the cost recovery method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2017 Journal entry worksheet 1 2 3 4 5 > > Record the 2017 recognized gross profit using the installment sales method. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2017