On July 1, 2016, the Foster Company sold inventory to the Slate Corporation for $320,000. Terms of the sale called for a down payment of $80,000 and three annual installments of $80,000 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 $99,200. 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.)

1.

Record the installment sale of $320,000 using the point of delivery method.

2.

Record the $99,200 cost of the installment sale using the point of delivery method.

3.

Record the cash collection of $80,000 using the point of delivery method.

4.

Record the cash collection of $80,000 using the point of delivery method.

2.

Prepare the necessary journal entries for 2016 and 2017, applying the installment sales method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1.

Record the installment sale of $320,000 using the installment sales method when the inventory had a cost of $99,200.

2.

Record the cash collection of $80,000 using the installment sales method.

3.

Record the 2016 recognized gross profit using the installment sales method.

4.

Record the cash collection of $80,000 using the installment sales method.

5.

Record the 2017 recognized gross profit using the installment sales method.

3.

Prepare the necessary journal entries for 2016 and 2017, applying the cost recovery method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the installment sale of $320,000 using the cost recovery method when the inventory had a cost of $99,200. 2. Record the cash collection of $80,000 using the cost recovery method. 3. Record the 2016 recognized gross profit using the cost recovery method. 4. Record the cash collection of $80,000 using the cost recovery method. 5. Record the 2017 recognized gross profit using the installment sales method.