Problem 18-10Paul 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 | $156,000 | | | Installment Accounts Receivable, 2014 | 58,000 | | | Installment Accounts Receivable, 2015 | 78,000 | | | InventoryNew Merchandise | 153,000 | | | InventoryRepossessed Merchandise | 37,000 | | | Accounts Payable | | $67,900 | | Deferred Gross Profit, 2014 | | 26,300 | | Capital Stock | | 166,890 | | Retained Earnings | | 37,500 | | Sales Revenue | | 408,000 | | Installment Sales | | 188,710 | | Cost of Goods Sold | 227,000 | | | Cost of Installment Sales | 117,000 | | | Loss on Repossession | 700 | | | Operating Expenses | 68,600 | | | $895,300 | $895,300 | The accounting department has prepared the following analysis of cash receipts for the year. | Cash sales (including repossessed merchandise) | $421,000 | | Installment accounts receivable, 2014 | 29,667 | | Installment accounts receivable, 2015 | 116,000 | | Other | 42,000 | | Total | $608,667 | Repossessions recorded during the year are summarized as follows. | 2014 | | Uncollected balance | $7,000 | | Loss on repossession | 700 | | Repossessed merchandise | 4,200 | |
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| | | Your answer is incorrect. Try again. | | | Compute the rate of gross profit on installment sales for 2014 and 2015. | Rate of gross profit on 2014 installment sales | $ | % | | Rate of gross profit on 2015 installment sales | $ | % | | SHOW LIST OF ACCOUNTS | | LINK TO TEXT | |
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| | | Your answer is incorrect. Try again. | | | Prepare closing entries as of December 31, 2015, under the installment-sales method of accounting.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) | Date | Account Titles and Explanation | Debit | Credit | | Dec, 31, 2015 | | | | | | | | | | | | | (To defer gross profit on installment sales.) | | Dec, 31, 2015 | | | | | | | | | (To recognize gross profit on installment sales for 2014 and 2015.) | | Dec, 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | (To close income statement accounts.) | | Dec, 31, 2015 | | | | | | | | | (To close income summary.) | | SHOW LIST OF ACCOUNTS | | LINK TO TEXT | |
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| | | Your answer is partially correct. Try again. | | | Prepare an income statement for the year ended December 31, 2015. Include only the realized gross profit in the income statement. | PAUL DOBSON STORES Income Statement For the Year Ended December 31, 2015 | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | $ | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | $ | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | | | | | Cost of goods SoldGross ProfitGross Profit Realized on Installment SalesLoss on RepossessionOperating ExpensesNet Income/(Loss)SalesTotal Gross Profit | $ | | Click if you would like to Show Work for this question: | Open Show Work |
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