Question
Sarah Incorporated uses the installment method. Date relating to the three years of operations were as follows: 2019 2020 2021 cost of installment sales
Sarah Incorporated uses the installment method. Date relating to the three years of operations were as follows:
| 2019 | 2020 | 2021 | |
| cost of installment sales | 5,450,500 | 6,500.450 | 7,225,560 |
| gross profit rate | 20% based on sale | 25% based on sale | 30% based on cost |
| Deferred gross profit balance after adjusting entries: | |||
| 2019 sales | 1,350,800 | 975,000 | 435,600 |
| 2020 sales | -- | 2,000,750 | 1,875,455 |
| -- | 2,201,658 |
How much was the total collection in 2021?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the total collection in 2021 we need to first calculate the realized gross profit from installment sales for 2021 This can be done by add...
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
