ARTS-PRTC CPA Review

INSTALLMENT SALES
PAS 18/PFRS 15
AFAR MICHAEL B.BONGALONTA,CPA,MICB,MBA

INSTALLMENT SALES

1. 600, 000 x 30% = 180, 000

700, 000x 40%= 280, 000
Realized Gross Profit 460, 000

2. Cost of Installment Sales 250, 000

/ Installment Sales 500,000
50%
Installment Sales 500,000
Less: Collections 100, 000
400, 000
X 50%
Deferred Gross Profit 200, 000

3. Gross Profit on Regular Sales 300, 000

Realized Gross Profit
(200, 000 x .50%) 100, 000
400, 000
Gen.Admin.Expense (100, 000)
Net Income 300, 000

4. Sales 60, 000

Collections (35, 000)
Uncollectible (5, 000)
20, 000
X 30%
Def.Rev. 6, 000

5. 2009 2010
Sales 1, 000, 000 2, 000, 000
Collections (500, 000) (500, 000)
(300, 000)
200, 000 1, 500, 000 = 1, 700, 000

6. Sales 900, 000

Cash Paid (150, 000)
Installment (250, 000)
500, 000
X 30%
DGP 150, 000
7. Installment A/R Beginning 750, 000
Installment Sales 950, 000
Installment A/R, ending (840, 000)
865, 000
X 45%
Realized gross profit 389, 250

8. Installment A/R, Ending 840, 000

Gross Profit Rate x 45%
DGP 387, 000

9. 2, 000, 000- 1, 150, 000 = 850, 000 loss

10. 50, 000 loss

11. 2010 2009 2008

12, 890, 625 8, 387, 500 1, 512, 500
(9, 728, 125) (3, 025, 000) -0-
3, 162, 500 5, 362, 500 1,512, 500
X 32% X 30% X 28%
1, 012, 000 1, 608, 750 423, 000

RGP 3, 044, 250

12. (9, 728, 125 x 32%) + (3, 025 x 30%) = 4, 025, 000

13. Installment Sales 425, 000

Merchandise Inventory, beginning 70, 000

Purchases 555, 000
Merchandise Inventory, Ending (92, 000) 38%
Total Cost of Goods Sold 533, 000
COGS-Regular
(385, 000 x 70%) 269, 500 (263, 500)
Gross Profit 1/5 161, 500

Gross Profit Rate 2009= 54, 000/120, 000= 45%

2010 2009
425, 000 120, 000
(200, 000) (16, 000)
(7, 200)
225, 000 97, 800
X 38% x 45%
85, 500 44, 010

RGP 129, 510

14. Regular Installment Sales 115, 500

 Installment Sales 129, 510
245, 010

15. (74, 667)

16. 16, 080

17. Trade in Value 30, 000

NRV
(25, 000- 1, 250 – 3750) (20, 000)
Over allowance 10, 000

Installment Sales 85, 000 85, 000

(10, 000) (30, 000)
Net Installment Sales 75, 000 (5, 000)
COST (60, 000) 20% 50, 000
Gross Profit 15, 000 x 10%
MONTHLY 5, 000

5, 000
20, 000 40, 000 x 20% = 8, 000
15, 000

18. 3, 740 DECREASE

19. 2009= 60%

2010 2009
1, 500 1, 200
(900) (630)
(450)
(24)
600 96
X 30% x 40%
180, 000 38, 400

218, 400

20. 2010 2009

Cash Sales 37, 000 27, 000
Installment Sales 330, 000 235, 000
Total Sales 367, 000 262, 000
Total Cost
Merchandise Inventory, beg 45, 500
Purchases 215, 000 193, 000
Merchandise Inventory, end (60, 000) (45, 500)
200, 500/ 147, 500/
167, 500 114, 500
= 45% = 44%

Deferred Profit (1/3 of) 110, 000

70, 000 77, 000
Collections 180, 000 77, 000
X 45% x 44%
81, 000 + 33, 880
+ (37, 000x 45%) = 131, 530