Question
please answer the whole question and show the calculations. Thank you so much! This is all the information in my homework. Maxwell Appliances accounts for
please answer the whole question and show the calculations. Thank you so much! This is all the information in my homework.
Maxwell Appliances accounts for all sales of its merchandise on the installment basis. Attached is the unadjusted trial balance at 12/31/X5. The following additional information is available for the current year.
(a) The gross profit percentage for 20X3 was 25%.
(b) Total cash receipts during 20X5 were $125,000.
(c) Merchandise sold in 20X4 was repossessed in 20X5 and the following entry was prepared. Dr. Deferred Gross Profit--20X4 2,200 Repossessed Merchandise Inventory 4,800 Loss on Repossessed Merchandise 3,000 Cr.Installment Accounts Receivable--20X4 10,000
MAXWELL APPLIANCES UNADJUSTED TRIAL BALANCE AT DECEMBER 31, 20X5
Debit: Cash $ 48,000 Installment Accounts Receivable20X3 20,000 Installment Accounts Receivable20X4 50,000 Installment Accounts Receivable20X5 90,000 Inventory 25,200 Repossessed Merchandise Inventory 4,800 Cr. Accounts Payable $ 34,600 Deferred Gross Profit--20X3 10,000 Deferred Gross Profit--20X4 26,400 Common Stock 125,000 Retained Earnings 10,000 Installment Sales 125,000 Dr. Cost of Installment Sales 80,000 Loss on Repossessed Merchandise 3,000 Operating Expenses 10,000 Totals Dr.$ 331,000 Cr.$ 331,00
REQUIRED: (1) What is the gross profit rate for 20X4? Show supporting computations. (2) What is the gross profit rate for 20X5? Show supporting computations. (3) Of the total cash receipts in 20X5, how much represents collections from installment sales for the following years. Show supporting computations. (a) 20X3. (b) 20X4. (c) 20X5. (4) What is the total realized gross profit in 20X5? Show supporting computations.
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