The Ethelco Appliance Company recorded installment sales of Br600,000 in 2002. A record was kept of the different articles sold on the installment basis. At the end of the year the total cost of goods sold on the installment basis was calculated at Br405,000. The total collections on installment sales for the year were Br360,000. The estimated value of the merchandise repossessed was Br24,000, and balances owed on the repossessions were Br40,000. Perpetual inventory accounts were maintained.

Instructions

Prepare the journal entries required for the data above, including the entries:

1. To set up the total realizable gross profit at the end of the year,
2. To record the cash collections
3. To record the repossessions, and
4. To record the realized gross profit