Problem 18-10 (Part Level Submission)

Paul Dobson Stores sell appliances for cash and also on the installment plan. Entries to record cost of sales are made monthly.

PAUL DOBSON STORES TRIAL BALANCE DECEMBER 31, 2015
Debit	Credit
Cash	$155,000
Installment Accounts Receivable, 2014	52,000
Installment Accounts Receivable, 2015	78,000
InventoryNew Merchandise	144,000
InventoryRepossessed Merchandise	45,000
Accounts Payable		$78,500
Deferred Gross Profit, 2014		27,000
Capital Stock		111,438
Retained Earnings		37,100
Sales Revenue		443,000
Installment Sales		178,462
Cost of Goods Sold	216,000
Cost of Installment Sales	116,000
Loss on Repossession	700
Operating Expenses	68,800
$875,500	$875,500

The accounting department has prepared the following analysis of cash receipts for the year.

Cash sales (including repossessed merchandise)	$435,000
Installment accounts receivable, 2014	27,412
Installment accounts receivable, 2015	102,000
Other	44,000
Total	$608,412

Repossessions recorded during the year are summarized as follows.

2014
Uncollected balance	$9,000
Loss on repossession	700
Repossessed merchandise	5,240

Compute the rate of gross profit on installment sales for 2014 and 2015.