Topic: Installment Sales

1. A Company uses installment method of accounting with the following information available:

	2017	2018	2019
Installment sales	500,000	800,000	?
Cost of installment	?	600,000	?
Gross profit	?	?	282,000
Collections on:
2017 sales	50,000	250,000	100,000
2018 sales	-	200,000	500,000
2019 sales	-	-	400,000
Realized gross profit on installment sales	11,000	?	241,000

Based on the information given above, the cost of installment sales for the year 2019 was:

A. 918,000

B. 940,000

C. 932,000

D. 900,000

2. A company uses the installment method of reporting. The following data were gathered for its three years of operations:

	2017	2018	2019
Installment sales	300,000	405,000	495,000
Cost of installment sales	210,000	243,000	321,750
Gross profit rate	30%	40%	35%
Balance of installment receivable, Dec.31:
2017 installment	180,000	135,000	60,000
2018 installment		300,000	195,000
2019 installment			390,000

In 2019, a customer defaulted; accordingly, the merchandise with an estimated value of P15,000 was repossessed. The sale was made in 2017 and the unpaid balance on the date or repossession was P22,500.

What is the gain or (loss) on repossession 2019?

A. (7,500)

B. (750)

C. 3,000

D. 6,000

3. Using the information in no.2, what is the total realized gross profit in 2019?

A. 183,750

B. 412,500

C. 36,750

D. 94,500