Question

PLEASE PROVIDE SOLUTION AND EXPLANATION

Question 1

Parker-Sawyer Corporation, which began business on January 1, 2020 appropriately uses installment sales method of accounting. The following information is available for 2020:

Installment Accounts Receivable, 12/31/2020 .................................P320,000

Deferred Gross Profit, 12/31/2020

(before recognition of realized gross profit for 2020) .....................224,000

Gross Profit on sales.......................................................................................40%

The realized gross profit on instalment sales for the year ended December 31, 2020?

Group of answer choices

c. P89,600

b. P128,000

d. P136,000

a. P96,000

Question 2

The books of SC Inc. show the following account balances on December 31, 2020

Accounts Receivable............................... ....................................................P313,750

Deferred Gross Profit before adjustment.............................................38,000

Analysis of the accounts receivable reveals the following

Regular accounts.........................................................................................P207,500

2019 installment accounts receivable.........................................................16,250

2020 Installment accounts receivable........................................................90,000

Sales on instalment basis in 2019 were made at 30% above cost and in 2020 at 33 1/3% above cost. Expenses paid relating to instalment sales were P1,500.

How much is the net income on instalment sales?

Group of answer choices

b. P10,000

d. P11,750

c. P10,250

a. P11,500

Question 3

Parker-Sawyer uses the instalment method of accounting and it has the following data at year-end

Gross margin on cost......................................66 2/3%

Unrealized Gross Profit..............................P192,000

Cash collection includes down payment.....360,000

What was the total amount of sales on instalment basis?

Group of answer choices

a. P840,000

c. P480,000

b. P648,000

d. P552,000

Question 4

. Emily Corp. Uses instalment sales method. Information regarding an instalment sales made on January 1, 2020 is shown below:

Gross profit rate..................................................................................................45%

Collection (principal and interest)-12/31/2020 is........................P20,000,000

Deferred gross profit-2020 (after year- end adjustments) is......P15,210,460

Interest income- 2020 is...................................................................... P5,764,400

How much is the sales price exclusive of interest?

Group of answer choices

c. P6,406,025

a. P12,435,600

d. P7,391,050

b. P14,235,600

Question 5

Emily Corp. Uses instalment sales method. Information regarding an instalment sales made on January 1, 2020 is shown below:

Gross profit rate..................................................................................................45%

Collection (principal and interest)-12/31/2020 is........................P20,000,000

Deferred gross profit-2020 (after year- end adjustments) is......P15,210,460

Interest income- 2020 is...................................................................... P5,764,400

How much is the sales price exclusive of interest?

Group of answer choices

c. P6,406,025

a. P48,036,622

d. P7,391,050

b. P48,036,215

Question 6

The following information pertains to Parker-Sawyer Corporation customers for the year ended December 31, 2019 and 2020:

..........................................................................2019................................... .......2020

Sales......................................................... P100,000................................... P120,000

Cost of sales...................................................80,000................................... 72,000

Cash collections

2019 sales..........................................70,000................................... 20,000

2020 sales......................................................................................... 96,000

If the cost recovery method is used, what amount should Parker-Sawyer Corporation report as realized gross profit for the year ended December 31, 2020?

Group of answer choices

d. P30,000

b. P44,000

a. P24,000

c. P20,000

Question 7

The following information pertains to Parker-Sawyer Corporation customers for the year ended December 31, 2019 and 2020:

..........................................................................2019................................... .......2020

Sales......................................................... P100,000................................... P120,000

Cost of sales...................................................80,000................................... 72,000

Cash collections

2019 sales..........................................70,000................................... 20,000

2020 sales......................................................................................... 96,000

How much is the total deferred gross profit to be reported for the year ended December 31, 2020 using cost recovery method?

Group of answer choices

d. P48,000

a. P34,000

b. P10,600

. P24,000

Question 8

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total realized gross profit for 2019 and 2020 using the time of sale recognition of revenue is

Group of answer choices

d. Zero and P200,000

a. P600,000 and zero

c. Zero and zero

b. P120,000 and P240,000

Question 9

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total deferred gross profit for 2019 and 2020 using the time of sale recognition of revenue is

Group of answer choices

d. P400,000 and Zero

c. Zero and Zero

a. P600,000 and P400,000

b. P480,000 and P240,000

Question 10

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total unrecovered cost for 2019 and 2020 using the time of sale recognition of revenue is:

Group of answer choices

a. P200,000 and Zero

c. Zero and Zero

b. P480,000 and P240,000

d. P320,000 and P160,000

Question 11

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total realized gross profit for 2019 and 2020 using the time of collection- recognizing revenue- cost recovery method is:

Group of answer choices

b. P120,000 and P240,000

c. Zero and P200,000

a. P600,000 and Zero

d. Zero and Zero

Question 12

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total deferred gross profit for 2019 and 2020 using the time of collection- recognizing revenue- cost recovery method is:

Group of answer choices

c. P400,000 and Zero

a. P600,000 and P400,000

d. P200,000 and P400,000

b. P480,000 and P240,000

Question 13

ON January 1, 2019, Emily Corporation sold merchandise to Mr. SC for P1,000,000. Terms of the sale called for a down payment of P200,000 and the balance is payable in two annual instalment payments of P400,000 beginning January 1, 2020. The cost of merchandise on the date of sale was P400,000. The company year-end reporting is December 31.

The total unrecovered cost for 2019 and 2020 using the time of collection of recognizing revenue - cost recovery method is:

Group of answer choices

a. P200,000 and Zero

c, Zero and Zero

b. P400,000 and Zero

d. P400,000 and P400,000