Hull Gan Co. uses Installment Method. On Jan. 1, 2023, Hull Gan Co.

's
records show the following balances

Installment Receivable - 2021 480,000.00

Installment Receivable - 2022 960,000.00
Deferred Gross Profit- 2021 120,000.00
Deferred Gross Profit- 2022 250,000.00

On December 31, 2023, Hull Gan Co.'s records show the following:
Installment Receivable - 2021 360,000.00
Installment Receivable - 2022 580,000.00
Installment Receivable - 2023 1,200,000.00
Deferred Gross Profit- 2021 (before adjustment) 120,000.00
Deferred Gross Profit- 2022 (before adjustment) 250,000.00
Deferred Gross Profit- 2023 (before adjustment) 750,000.00

Installment sales in 2023 were made at 33 1/3% above cost.

Requirement:

Compute for the Installment Sale in 2023

Compute for the cash collections in 2023
Compute for the total realized gross profit in 2023
 Deffered Gross Profit 750,000
Gross Profit rate based on sale.3333/1.3333 25%
Requirment A: Installment sale in 2023 3,000,000

Alternative: 750,000/(33.33%/133.33%) 3,000,000

Installment receivable - 2021 Jan 1 2023 480,000.00

Less: Installment receivable - 2021 Dec 1 2023 360,000.00
Cash Collection in 2023 120,000.00
Installment receivable - 2022 Jan 1 2023 960,000.00
Less: Installment receivable - 2022 Dec 1 2023 580,000.00
Cash Collection in 2023 380,000.00
Installment receivable - 2023 Jan 1 2023 3,000,000
Less: Installment receivable - 2023 Dec 1 2023 1,200,000.00
Cash Collection in 2023 1,800,000.00
Requirment B: Total Cash Collection in 2023 2,300,000.00

2021
Deferred gross profit Jan 1 2023 120,000.00
Divide Installment Receivable Jan 1 2023 480,000.00
Gross Profit Rate Based on Sale 25.00%

Collection in 2023 from :

2021 sale (120,000*25%) 30,000.00
2022 sale (380,000*26.04%) 98,958.33
2023 sale (1,800,000*25%) 450,000.00
Requirment C: Total realized gross Profit in 2023 578,958.33
2022
250,000.00
960,000.00
26.04%
Hull Gan Co. uses Installment Method. On Dec. 31, 2022, Hull Gan Co.'s
records show the following balances

Installment Receivable - 2021 480,000.00

Installment Receivable - 2022 960,000.00
Deferred Gross Profit- (Before Year End Adjustment) 560,000.00

Gross Profit Rate in 2021 is 24% based on sales, while gross profit rate in
2022 is 33 1/3% based on cost

Requirement:

Compute for the total realized gross profit in 2022

 Deffered Gross Profit (Before adjustment)
Less:Deffered Gross Profit (After adjustment)
Installment receivable - 2021 xGPR (480,000*24%) 115,200.00
Installment receivable - 2022 xGPR (960,000*25%) 240,000.00
Requirment A: Decrease in Deffered gross Profit realized gross profit in 2023
560,000.00

355,200.00
204,800.00
Hull Gan Co.'s records show the following balances

2021 2022
Deferred Gross Profit- (Adjusted Ending Balances)
2021 Sales 200,000.00 135,000.00
2022 Sales 335,000.00

Gross Profit Rates Based on Sales 25% 20%

Cash Collections:
2021 Sales 1,200,000.00 480,000.00
2022 Sales 1,550,000.00

Requirement:

Compute for the Balances of Installment Receivables on Dec 31, 2022

Compute for the Installment Sales in 2021 and 2022
 Deffered Gross Profit 2021 sale, Dec 31,2022 135,000.00
Divided By: Gross Profit Rate in 2021 25%
Requirment A: Installment receivable - 2021 Dec 31 2022 540,000.00
Add Back: Collections 2021( 1,200,000+480,000) 1,680,000.00
Requirment B: Installment sale-2021 2,220,000.00

Deffered Gross Profit 2022 sale, Dec 31,2022 335,000.00

Divided By: Gross Profit Rate in 2022 20%
Requirment A: Installment receivable - 2022 Dec 31 2022 1,675,000.00
Add Back: Collections 2022 1,550,000.00
Requirment B: Installment sale-2022 3,225,000.00
Information on Vina Wee Co.'s Installment Sales is as follows:

2021
Sales 150,000.00
Cost of Sales 120,000.00
Gross Profit Rate 20%
Installment Receivable - 2021 90,000.00
Installment Receivable - 2022

During 2022, Vina Wee Co. repossessed a property that was sold
in 2021 for Php30,000.00. Prior to repossession, Php8,000.00 were
collected from the buyer. The repossessed property is expected to be
resold for Php20,000.00 after reconditioning cost of Php2,500.00.
The normal profit margin is 21%.

Requirements:
Compute for the gain / loss on repossession
Compute for the total realized gross profit in 2022
Compute for the profit recognized in 2022
 Requirment A: Estimated resale Price
2022 Reconditioning cost
225,000.00 Normal Profit Margin (20,000*21%)
175,000.00 FV Repossessed Property
22%
40,000.00
150,000.00 Inventory
Deffered Gross Profit(22,000*20%)
Loss on repossession
Installment receivable

Installment receivable 2021

Beg 90,000.00

Realized Gross Profit From:

2022 sale (28,000*20%)
2021 sale (75,000*22%)
Requirment B: Total realized gross profit in 2022
Loss on repossession
Requirment C: Profit in 2022
20,000.00
(2,500.00)
(4,200.00)
13,300.00

13,300.00
4,400.00
4,300.00
22,000.00

Installment receivable 2022

22,000.00 write Off Beg -
28,000.00 Collection 225,000.00
40,000.00 End

5,600.00
16,666.67
22,266.67
(4,300.00)
17,966.67
- write Off
75,000.00 Collection
150,000.00 End
Vina Wee Co. uses the installment sales method. On Jan 1, 2020,
Vina Wee Co. sold inventory costing Php150,000.00 for Php200,000.00
payable as follows: down payment of Php50,000.00 and twelve
monthly payments of Php12,910.00 due at the beginning of each
succeeding month. After making four succeeding monthly payments,
the customer defaulted and Vina Wee Co. repossessed the inventory.
The fair value of the repossessed inventory is Php95,000.00
The installment includes interest of 1/2 of 1%.

Requirements:
Realized Gross Profit from the Sale
Gain or loss on repossession
Requirment A:
DATE: Collection Interest Income
1/1/2020
1/1/2020 50,000.00
2/1/2020 12,910.00 750.00
3/1/2020 12,910.00 689.20
4/1/2020 12,910.00 628.10
5/1/2020 12,910.00 566.69
Collection Pertaining to principal

Requirment B: Inventory 150,000

Deffered Gross profit 25,248.50
installment receivable 100,993.98
Gain on repossession squeeze 74,254.52
Principal Balance
200,000.00
50,000.00 150,000.00
12,160.00 137,840.00
12,220.80 125,619.20
12,281.90 113,337.30
12,343.31 100,993.98
99,006.02