(Installment-Sales Computations and Entries) Presented below is summarized infor
ID: 2433827 • Letter: #
Question
(Installment-Sales Computations and Entries) Presented below is summarized information Johnston Co., which sells merchandise on the installment basis. 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,000 183,800 182,000 Gross profit $95,000 $96,000 $90,000 Collections from customers on: 2010 installment sales $75,000 $100,000 $50,000 2011 installment sales 100,000 120,000 2012 installment sales 100, 000 Instructions Prepare in journal form all entries required in 2012, applying the installment-sales method accounting. (Ignore interest changes.)Explanation / Answer
Installment Accounts Receivables -2012 $280,000 InstallmentSales $280,000 _________________________________________________________________ Cost of InstallmentSales $182,000 Inventory $182,000 _________________________________________________________________ Cash $270,000 Installment Accounts Receivables -2010 $ 50,000 Installment Accounts Receivables -2011 $120,000 Installment Accounts Receivables -2012 $100,000 __________________________________________________________________ InstallmentSales $280,000 Cost of InstallmentSales $182,000 Deferred Gross Profit -2012 $98,000 __________________________________________________________________ Deferred Gross Profit -2010 $19,000 Deferred Gross Profit -2011 $44,400 Deferred Gross Profit -2011 $44,400 Deferred Gross Profit -2012 $35,000 Deferred Gross Profit -2012 $35,000 Realized GrossProfit $98,400 __________________________________________________________________ Realized GrossProfit $98,400 Income SummaryAccount $98,400 __________________________________________________________________
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