Chapter 6 INSTALLMENT SALES Introduction Generally, the nition. And among the exceptions to fallment method. Under ‘made, because the 1d period of time may ‘pability of collection oi of sae isthe point of revenue recat Point of sale realization concept is the ins {his method, income ig recognized when collections. are sacgtainty of collecting accounts to be receive over an extend Suggest the postponement of revenue recognition until the pre can be reasonably estimated. GROSS PROFIT RECOGNITION ON INSTALLMENT SALES Insallment sales may be regarded as calling for special treatment whereby gross Profit is elated tothe pride in which te installment receivables are collected rather {ean 10 the Periods in which the receivable are created. The inflow of cash (Collections) rather than the time of sale become the criterion for revenue recognition. Accounting for installment method or installment basis could be best illustrated by Providing for the recognition of gross profit in proportion to collections. Under this method, collections are regarded as both return of cost and reelization of profit in the ratio in which these two factors are found inthe original sales price. In applying the installment method in the accounts, the difference between the contract sales price and the cost of goods sold is recorded as deferred gross profit. This balance is recognized as revenue periodically in the proportion that the cash collections of the period bear to sales price. Stated differently, the original gross rofit percentage on the sales is applied to periodic collections in arriving at the amounts to be recognized as revenue. At the end of each period a deferred gross ee rude hen eerie at eeLt mm sted based on the data provides cots profit By the installer one: Normally, it may be computed by dividing Me oer i eit apa, gon prot ae may ao be come isi yor by dividing the deena) the installment accounts receivable ved able (end) ferred gross profit (end) by the installment accounts Ks geatized Gross Profit ‘The installment ueniad of accounting recognizes profits at the point of collections, shus realized profit is based on amount collected. Ordinarily, realized gross Profit ‘fay be computed by multiplying the gross profit fate by the amount collected. It ‘ould be pointed out that in case of defaulted contract, collections should be net of Shy unpaid balance on Mefulted contract. However, if this formula is not applicable, wolized gr0Ss profit may be computed by determining the difference between the [jeferred gross profit (before adjustment) and deferred gross profit (after adjustment). peferred Gross Profit As stated earlier, the installment method of accounting recognizes profits at the point ofcallection. If realized profit is based on amount collected, the deferred gross profit js based on unpaid balance. The deferral of gross profit is, in effect, the deferral of sales revenue accompanied by the deferral of cost of goods sold relaied to such sales revenue. To compute the deferred gross profit at the beginning of a period (before ‘uiustment), installment accounts receivable at the beginning of the period should be multiplied by the related gross profit rate; and the deferred gross profit at the end of the period (afer adjustment) is equal to installment accounts receivable multiplied bypre site chew an verona wun ora aetna ‘nan Sige on velo en Se one etd lifference between the cost of go« het sales, the total installment sales lesy cayenne en fede ot Defaults and Repossessions the gain or 1oss on repossession. As in the ease OF Boods acquired by trade-in, the repos: urticle should be recorded at an that will Permit a normal gross profit on its resale. Interest on Installment Contracts ‘a charge for interest on the balance due, ith the installment payment that reduces | Although is included in the pe nly that portion of a payment which reduces the principal t contract receivable should be considered in computing the balance of the in: realized gross profit.Lc cc y ote Sales x mone ue TiPLe CHOICE QUESTIONS ” op. 1 CAICPAY x08 «hr collection is critical event for income recognition in the ca eo Cost recovery Then mettt. method : ‘No a b Yes Yo. £ No va é Yes ie pros. 6-2 (AICPA) ; is ‘rhe installment method of recognizing profit for accounting ‘purposes scceptable if = ° Collections in the year of sale do not exceed 30% of the total sales price: b. ‘An unrealized profit account is credited. . ©. Collection of the sales price is not reasonably assured. = 4. The method is consistently used for all sales of similar merchandise. PROB. 6-3 (AICPA)PROB. 6-4 (AICPA) Under the cost recovery method of revenue recogni Income is recognized on a proportionate basi sale of the product, %. Income is recognized when the cash received from the sale of the roduet is greater than the cost of the product. Income is recognized immediately. d. None of these, | ‘as cash is received on the PROB. 6-5 (AICPA) Chris Co. sells equipment on installment contracts. Which of the following statements best justifies Chris’ use of the cost recovery method of revenue Tecognition to account for these installment sales? ‘The sales contract provides that ttle to the equipmient passes to the buyer only when all payments have been made. b. No cash payments are due until one year from the date of sale. ©. Sales are subject to a high rate of return. 4. There is no reasonable basis for estimating collectbility. PROB. 6 - 6 (AICPA) Winner Co. is engaged in extensive exploration for water in Utah. If, upon discovery of water, Winner does not recognize any revenue from water sales Luntil the sales exceed the costs of exploration, the basis of revenue recognition being employed is the a. Production basis b. Cash (or collection) basiet , 6 ntti Sle nat is the balanes of an installment ws ex the eal? what aye ofthe oF gia ales price tote receivable 6 months after Tes than 75% ofthe orginal sales pice ‘The present valu ae o Te © ofthe remaining monthly payments discowr' 4. Less than the present valu i — Lees ed at 126 eof the remaining monthly PY prop. 6-8 (AICPA) con January 2, 2009, Colt Co, sold land that cost P600.000 for 800,000. On ving a note beating interest at 10%, The note will be paid in three annual rerallments of P321,700 starting on December 31, 2009. Beraie collection of the note is very uncertain, Colt will use the cost recovery ‘method. How fmuch tevenne fom his sale should Cl recognize in 20097 a bv. 6,000 c. 8,000 d. 20,000 PROB. 6-9 (AICPA) Several of Pitt, Inc.'s customers are having cash flow problense, Information pertaining {© these customers for the years ended March 31, 2009 and 2010 follows: 2009 2010 py To,000 ~-+15,000 3,000 9,000 Cost of salesPROB. 6-10(AICPA) ‘The following information pertains wo sl fra estate by South Co. 0 Nord, Co.on December 31,200: Carving amount 4,000,009 Salt ee ‘enon Purchase money mortgage 5400000 6,000,009 ‘The morgage is payable in sine arn! inallmens of 600,000 beginning December 31, 2010, ps interest of 10% The December 31,2010 installment ‘was paid schooled, tgeter with atest of PS40,00, South uses the cost ‘eovery method w scout forte sal. What mount of income should Sout, ‘ognize in 2010 rm the rel ete sles ts fnancing? = 140.000 & —7aa000 $40,000 ‘ ° PROB. 6-11 (AICPA) Hil Company beg ope o ay I, 20, sn pple Be tine melon Daal 0D ae oe Installment accounts receivable, 123108 Instalimenteler sano (Con of gods sod, as percentage of et po ‘Using the instalment metbod, Hil’ a 360,00 alized gross profit fr 2009 would be & 240.00 © 200,00 & 140,000 sort aa Sl we viet ims prop. 6-12 (AICPA) Lugs Co. wich en penn ry ws sa od cate a ane Pct sae is Sleiman a sae ernie ote “= em Gross profit on sales. oe a Cd eG er) 20 atten trt el cote a ae oad a ee Dae Ss ee. me i se 8 PROB. 6-13 (RPCPA) “The books of Pijakan Company show te following balances on December 31, 2009 Accounts eeivable 313,750 sorta OR neaeoanrtnin | ep Pe a po oan 2008, a alee on an inlet basin 208 wee made at 30% above cost 2009, Sales on an pupae pa wes P1300 relating to installment slesBatt How ouch is the net income on instalment ses? 1,000 11300 © 16000 & 10250 PROB. 6-14 (RPCPA) ‘A company uss the installment method of accounting fo recognize income, ang Pertinent data areas flows 2007 2008 2009 Installment sles 300.00 375.000" 360,000 Cost of ales miso 285000 252,000, Balance of goss Profit at yearend: 2007 52,00 15.000 - 2008 4000 9,000 2009 72,000 ‘The balance of the receivable on December 31,2009 i 2270000 b m300 © 279000 4 3¢0.000 PROB. 6-15 (AICPA) | Tat Comm which began buss on January I, 208, aproprialy ues the installment sales method of accounting. The folowing data ae availble for December 31, 2008 nd 2009 mm Balance of deferred gross profit on : ae —— | oon 20 arn) (Gross profit on sales 0% an sr nan Se coop nts Th inn un bane ot Decne, 2098 b. a ‘PROB. 6-16(AICPA) Dolce Co, which began operations on Jamsry 1, 2008, appropriately wees the installment method of ccomting record revenues. The following information i available forthe yer ended December 31,2008 and 2009: 2008 2009 7,000,900 2,000,000 sate Se roti eae oe ma sp ‘soo gaa i ‘on 0% res prope wnat amount of ilies cout December, 208, be set? 1238.00 monn + SLi. 100 rectivable should Dolee report in Jt PROB. 6:17 (AICPA) a vce Corp. ese insist method of reporting The folowing data atered for itt ens foros: 2007___2008__ 2009 Big hs as veto ee see ee 3 PO alent receivable, Det. 31 Balne finalise Frog 435,000, 60,000 atin Bae Eee se 2009 inlet sales| : itm cnet 1209, «cao dtc ning, he mechani ‘te of i300 rsp Te en mace 207 ad pi Son i fsa 20. ‘What ie th tl ein gros profit in 20087 412300 183,750, 34300 363750 sth amount of gin ot) en eposesion in 2007? 7500) (30) 000 3,000 PROB. 6.18 (RPCPA ‘The Cental Pains Subdivision sls eset! subdivision Ios in inlet ‘Te following infomation was ken foe the scouning recurs of Cental Phin Subaiviion att Deseber 31, 205 Installment accounts receivable, 1109 1735000 Testament account receivable, 123109 40.000 Usain gros profi 1109 335,50 Insalment sles, sa000 ow much ish realied pros pofitin 2097 2” "27500. B s39730 309250 PROB. 6:19(AICPA) oso cr. hich began ston ney 1, 209, appropri wes te Instn le metod ef accountng fo con a peng pene The ‘Sowing dar ola or 0 Installs ecb, 125 Installment ses e299) 12300" oon Cr rien ss 09 Ck inns eo, wat wt be Rosa's deed os profit at Dece ? oan o00| % sno00 © soo00 rr) PROB, 620/AICPA) arr Co, began operations Huy 1, 2009 and appropriately wer He ‘Sealine meted of soung Te flowing nermaten pertains 1 Ka pean foe 208 Insane sles 00000 Costef insane es ‘sue (Genta and adnate expenses ee Collections ca stale ss 004 “te balance inthe defer ro profit coun at December 31, 2009 shoul Be 2120000 1000 © 20000 4 320000 PROB. 621 (RPCPA) “te Bownot nc, boeing tte st of he clea ea 200, wt ‘matin etd of ning 400.000 insane Peed Invemory, Deven 31,200 ey CET cimcrine expen nme Gener eeebl Dcenbe 31,2009ar tet Bo © ‘96000 4 000 PROB. 623 (RPceAy ‘ross margin on cst 623% ‘Unread gro profit 192000 (Cash collections inlding dow payments 360,00 PROB, 623,AICPA) Lane Co, which began operations ca amuse 1,200, appropriately ses the insallneat method of actuating. Te folowing information peas Lane's ‘operation or the ent 2008 PROB. 624(AICPA) PROB. 625(RPCPA) ‘These dt pein + Dawe py1s receivable athe end of Year 3 PROB. 6-26 (Adapted) is ave bea od nd accounted or bythe instalment meth are "poses and retumed to iver, they shouldbe ecard oe ofthe inslimen receivable et aucited def pose He eposesed merchandise a book teeae ~ ht tg ae R08. 628 (RPCPA) The uneatze gos profit or inlet sls mae ding Yeu 2, ” ofthe cad of Yer none . 0 of December i, 2 A a PROB. 626 bes sold and accouned for by the insfaliment method are sed and retamed oven, they shouldbe recorded 208 commonly used Yo report defaults and repossessions is ‘Provide no bass forthe eposeacd as ery recognizing ons "abv, recoding pia ot Ne reposescd merchant at book valu, recording no gain or 4. None ofthese,ek __enpr tate te ‘Tye os on repossession made on 4 2008 ae Wa 8 et sales are recorded at contr price. Any ntact are being charged Yo wncolectbie ed merchandise were cede Yo uneolecte ‘Sccouis expense Inte re ecogaised nthe prod cane Fors Ht ear© Thelosson reposition made on 20898 W# © 126230 4 pnwernctgiven PROB. 629(AICPA) ‘halinents.a apr ate Se a ROB. 637 (RPCPA) PROB. 635 (AICPA) tomer Realy bough fam, Lot A ws bo PROB. 636¢a1cPa) Baker Co. i el Baker appropriately over 30 yeas Baker’ rss Balers two year f pe Sate (Cash colecionecar: ba PROB. 639(AICPA)What i the PROB. 6-46 Init int oun nt met of evens cognition. Te ellos le forte yor ended Decor 3 . Che Tea Heoteon ol‘SOLUTIONS AND EXPLANATIONS PROB. 641 Sugzested anrver() he tnstalinent method i sed whon cole of te sles rice isnot (Furonaiy assured Hower when te cea of caletio 50 reat ‘at ven thee of thet method special, he th cut ‘Sigh method maybe ed ng no veal ean ulecbicy would provide a grat enough uneriint 10 6 HE cost recovery met PROB. 6-2 Suppesed amor (o) per, the profi onsale in the orinary cure of busines i considered ‘0 be realted ate tn fsa iene bh te ale pice ‘wl be collected. Tha if collet of the nae ce ot ease ‘ited. the installa mth hl Ba PROD.6-3 Sugeve ansmer(b) ‘he istalinot method of accountings cd when there ie igh degre of scoring rearing the colette sal pce Unde ts mote, sale evens ad the related eo of gods sod are rcoted Inthe nad of heal Hever, he ert pref ered oe prod fe PROB.6—4 Suageedannver (i) Linder te cs recovery method, got profi dered and ecg enly "hen the cman eceparexesd th cot of te tse PROB.6S. Sigsenedonmer Oninariy, revenses should be accu for when a wangcion i ‘molt ith porprtepravin fr uncalecil aceut Hoses ‘hn this no tonal as fr etna the degre of elegy ‘iter he saline metodo he at ony mod maybe OE geeememeesy lw co recovery thd. ot ofthe em mld POM oly er collections exceeded the PROB.6-6 Sespeed aren Under the ost recovry tho, no proto any tps recognzed util he ile chal ai tre ced cn cae PROB. 67 Seagenel ance) ‘The bone fo lente eae suas he apa ance of rcp. Th difirece bree the gos reac and the paid ‘rnc te inert. Thro he Salnce of the nate eal 1 he reset ae of rence payments cote te cnt ret PROB.6-8 Sezpsed omer) 0 Under he ot recovery method mo prof of any pe eg unt ihe multe recps pcan eres) xeed he cst of he se sO he cst of POO. nate rnd 200), no ea of evere Som sou 6+ Semen ehieamaseron ae sn 72,000 =e seereaee 28 ap See = ex easy mato nts pri ony ar clecons ee he ae hen Re pil o ay ben covered. Seen! ete orca ene as relied ers raiPROB. 610, Segpeedonver (0) FO asin, the est recovery method recog srt ont tr collections he at often eat wh fl cst BERN CONTE Ay ‘Beemer any P2009 of th P4000 hs BN eee has, come hae rend PROB. 611 Segenad exer) 160000 arene 0000 inet scm ecb, 123 200 cottons ae. Matty by os roi on ale (100%) “io Read gos pot, 209 ia Se emai tf me hn Set Set oe eer ar a Saree tanec me acai feany a carmmaeyee Eo Rancho ate per ane ig ar nade ies Canteens leet en at ea me eesti ne wi ce ea PROB, 612 Sigpesedanover() 00000 24,000 Insttiet a 560000 40%) 1400000 ‘a etal son ea 125109 (asso Maki ee pat a ae Om est pr pt 200) Her omersctmioti recognition. This Ute with reason princi tat font Italien sles, roma copied are oot of clon. ther is posi of eelation of the cnr nd substantial olen ts may Be inured When gros pref i regarded a comtngen! oe cxlleton of eas, hres stronger np fr ts egtion ov the ene ‘lection period. There, prot clecon, which regarded as representing, bth © recovery ofc and reatn of grasp mast be maiplicd 627 Profit ate on sleds the eed ros profit forthe period: ‘Due 1 yearend eny 10 adit the dafered gross prof for purposes °f erat ts ltr tren eerie iah tie ea ere See epee aed Eek ang wacaieramaronst = secu bee Tess defared pes ptt erste!) 208 sles (1625030130) 38000 a0 oo als os (6000838 1313313) mso0, 26280 Rete pos ot 9 Tess eapnss ling tient es ie Noses te ‘he cnputon often poiforg ven paid ot coed Sse amma ating ees ro rete: caer econ rand he met rs a re es fella res as Pf Ce ea abort gram aro teen fh ered oe ct a ch Banc. Tar th ee de aed nora bore adisment ond he Meter aja ted we ee PROB, 614 Sepgenedonoer (0) F275209. Inmet es FRONT. SHOR Soectaer™ —_SBamioen. _ 22007 copa Seen). toot se Inte fonts 020) 13 Sito gesesme Gow 20a Se 1 ppg he line muta he ecu te diferece beeen thi rc ond i oof aire aia A os Prot Ts tance ep tren persica b proarion fet he cath colin of te pad or es Pe, Seed iar te et a Sande ‘teen eek perod fre gro fbn rama tefl, nd" gut tothe grat pot peerage ped 1 te Blanc of ‘linen echetc afte dee PROB. 618 Suspend anmer (P1500 Folia! senate 2008 sas (120000 30%). 209 sales (4000 00) 1.07000 Intent acount esa, 12009 iepcmeepaetret stiri vate at S7aie ate me ett om pa pen ato i Riera as Ena PROB. 616 Sxgseuedanter(6)P.708000 es cotton tome ‘0s see {100 +90 any 30 Hoo ae ‘aon0n 40%) ‘Toalintlinet ass Reseible 123108 si coi wth he rome lets nce, if ‘Scion the rsp rand ih ‘SmputedBy aig res prot percent ‘ection ing porta, odie te acu an. toon, 10.000 tment aes nr vost with he omc ‘rom howd nti ire led rs prot at agen por wis ciel ye rept pos Pt Feral ot of @ sien de Pema ect i aa ri aS oy "ate Sales, Terre the linn oro. 009 shea be Po (0.00 * 1300.00 Ron. 617 "Sage ame) P4500 eset rae, 123108 Tellme eae [2319 Foutectis Tossa lee cher word 8 prope coc asthe aint eee 2500 December 3 Bet Se sme 05000 Sion Teepe TOD m. ee Br, ae tion bal a the ts revenue recog onl aun of nainent ‘peolleced, Ths amount et wth the ectable mailed ne eed Tt, the tll $88 ProfitEE —_— elected 2008 regards of he yr ofa, se amet of PH4.306 (1704.00 350) mpd re Siegler (0) 780 teed ‘50 Ta Y the entone dents or an tatnnt ctr! and m0 fcr {lc an me llr may ipo he meando fe og de {be pte mera irc ae le han the Areca efi hee te aes tn ‘Srrpocctn vt road Contrch Ye eke spa oe ‘pated mrcane mor ane secede art ‘opie cone tment a at sn tO fo ‘here! pein tet se Peon 618 See er (0 9.20 epee 0) 735000 att a 2109 ‘a api ye ra a ne " ‘aintsa ss ig Reaaa pos pet 2009 st sno of eh pri fred at a pa igen refractor e ee seat pnt fea he po ona ‘ini cmt fot ee ef oe “ene face is pt te PROB. 619 Spel xeer() 89000 Inte cn ibe 123109 op ity ye ptr ‘oe Deter go e099 088 asin we the asics hd of acum deferens oft ‘Mle that oni th ba endear pale ‘ai pcg sped ke of ne eae PROM, 630 Spat aver 2000 tie le, 209 sw0.000 (mclaren et ‘ro Inti ena 129108 oo. Mat pte as ‘i ss00) sno) ite ete wos pt 123109, =e ‘cco abl 123109 yy ems pam es rare eed 0 psi 123.09 aa Yami te a lei seu recon principle, ad gross epte cota rig the pro, te ered gross profit ens eld he fe nd of ours th reef mdr privat ons PROB, 621 Sept ner) PDREND 2000RON. 622 Spat er Diy te soma ees | SS oem epi waarmee ‘Se hao ter ROB, 623 gpd our) OND Intima soni, 12310 won Mig gps aan i a at po a 200 Siet ie era ea ote ener be hd et ene le poe of ean ae ac cl facta wh pf ay he noe ring espa pt i re ent a Se el be Mogul chl orang ert epee la pe PROM 624 Sere ner F580 Stes omy m8) tia We sao (0800) atin au cai 5109 SG OMY aii epson ee Peteede pet astm a 1 rend rot cons apt wate, on te ple ‘arate ets a Sa ats a eno ar er rh i i tm, iii apace oe Sopahomarnie 2 Sagem oF soso ar treme ma ieyceaere Bae sya gp ina mii et sep led rare el eae ee Fe me a ma of ek ‘ta ot TET sae ahve compos Shae onwer(o P09Use dowmpayac (0) etic yr ale x80) ayy opt ei po tate of Yer? Peart harrier funcre ioe: Spt omer NO te Sir sor Ber) ais, __cmson eee swe — Tae "Yat 2s 0 Mersin gua _omxo eed Yor) ina z Sie es ice exc ht a ie gt Sener aalRa a ota Spear L165 sinters nantes.) _ AB lily y bom pn se Toi Une gs pin of Yew} a sn the sai gr profi a teen of Yoo 3 (Sota porto fates dir 7 nd of Yoo ermine yop BT Shia pron tbat ae . see i rt ha Cea a ey SASS oe cae PROR.62T Seed one) os in cna and epaseson of te Pe ot Siro anyon Boks of te seer tat repo the i hit dae in vege if ae he at of repr Sonne a Shep ane PAILS tate abl 208 ale, 29108 2900000 orice Smile, 120009 1.00000 ‘rales Tos. 00 Erde cont 7950.00 also 208 735000 Serine ron les (54.000 120,000) onde olen, 208 sale. Brestsania 8500 sa sso cio oan nd pe ‘ulna nen ler ce ea a mse: oc as farsa eae ion pp aha fo ere temanes e elo rer te from heal tof one or roe eeninte tema Se “apend oower ne an eel etaie 30 Lacuna 5085) eas tenon S Sears ett eit roe oe cataract re eee ee eas eaeieticioes stares, Sassi crane 8 (028 Sgt mn) 7250000 Catena pre 200000 yoy open “(ego oy 800) suum esi ps pr 2010 ‘tot 0000 denier etal ef econ, oom aes sa a ee cee ot of reaton, Bele rr ceed tg te grt prof ro setae ‘ht ro aos ue te roe prove fora charge for nares te ale wth he boner! ain our vee ade tt fei Aenean dna se cease pi nttn ot nse re end rps ft a ly Bay oe fe a pe ‘cu ee sna ag wh ke ‘ttt pr enon an Sse noe 880 =e ea ‘etl gat fre how lessee aa “a isu oie ey tame aoe eae ea Pl = Colletons, 2009 sales in 2009 Sie Se oS - ae pec een eal Sr raul sae (spit of sale: whe tat for means sales poi 6, nore Sh ap sd for regular sles fromthe ttl cost ald for purposes of ‘mie espa nc Serdar an rpm rnd Leeceton so Bas Ari te es of snes ade 8 bt ‘Sab ene aa ont al port forma ee mnt teat led re re oo SOREL a tere wend co on 63 Sse 9D Sarees sa eed 3s tect wane ae nde he stint mod of acouine y ama elie ‘er mn 9 ce ln rt ie he os Poe Ty tarredomen sto be isan od ric ho soon og ‘ore obi pr sr a a, So pene meee seri mtn someon tee gi eet Sree ee pr 4 fone rcs te eis a Tc a te “4. nein rebscton a he principal bance re rot pope pd erg! non. 638 apne nner 3% Soi Tn cnn ce te a1 a leona om mt = Pa mee = 47292. = etre ti rio ete Hof sta a5 80 na hatin a a 8 pce i — ey Sager 4 nae ne ie sai000 ‘tec a0 aa =a Noni oles ane segs! Bans Seow Shami sen00 in mtn orcs pent re fra ara tee, SP ne mie ene arty pale he PRS il eee er per eth ‘pop hap oe ech tit, ‘Sslareame on nid cae 9 POSH Sx er PMN 98 coh od Pact poram ping pcp on on "ie See nse eS) 3026448 sepa in elo eae "sau mes = ‘eatser in pitatethpie aii soft) i ep 30" Basse~ ——_t i Snes he nderng ra econ pe fot elite Pale even and epets he re incomes Sateen rte Pe a seg rm re ie cllecad u's normal ene, read gros rot tual fo fot (este rf provider thrall nreaes are added and 3 Sot ios i rl apd ie a A a dedcied except the changes in some item lik eer ee ee aa name eee Sr ent ge eae es * emer on Nara 209, 23109 216000 i 28109 ws1a32 a ce 1 28 | Buca @ Ce ia twig 8 isanet or CE a ee [seen a eee a come nner i. ise Shetemsepinint aa pot 2 a Cop hr (034772! 315.932) 422835 enme aie ee | es Termes, SUS ae posi a one as mim coe, St er lyr ere cere neaeioneieo St pence Em she cent eed yo 08 + rae | abate aos soos er mae wu anodes a8) a ‘ei ing pr ofthe eed Thee sued ps ei 2007 ‘wo ao» clot ae ny "P0400 euler 2009 sorrel me bs recording rectipt of note, Note Re ‘owt cif ts eRe ad be shat bpd ate ta anit u acca paanteteee | 1 hd pe er nd 309 a, Tay, ied ee nl caf pic eae Seman bing mes ee ees pi 7 ary mort cc ceo eke ee Ron. 632 Sgn er (0 P10aT fo on | ies iho | — aor cc en cota Rate 308.000 “tsasot8seF 50) 30) sn, okenete = i frp f cmp he ered rs oh ee 0 | ‘Nt rent rf he a we Fah a Seam neengeas ter ree, ‘Ft inl we nen pes eon eon ‘peptic agin ol ee ‘om eon Sarin he mast he tw pl med el ts ad PROG Supe sre 18000 oot 270.000 Lona 5S Tetrion Te at an ott ph inant =e td be elt Der = ieee te rn of acing med epg ree 2 fm fn rrr he aed ee ete wat Seen Serine ™ te PROBES Sap ome 29500 oo ‘ro ot s00 182900) Dar sg Age Corte a mae eae e900 ‘amet ae ptt Dee 31,2009 200859. ‘Tualatin ere see 50 sa cee cars team’ PE (pip wh ass cman eed Pa PROB.638 Seeder 280 Cons 10% nips Bais ‘eel mes 0S SUS, name ge Z : apple frst can stent ig yy iim PHONE ed nner PSH nt ne 208 *4gpe ‘ie cs med, 29108 ont Mage esp poem i a Deol poste dr mest ar, fre rn pata en of 8 en ASSTESRLITEC ier cour cable mee rind Pel eerie Wit on ulation Foppocrmne bed ootan mt Cath caters 0268 kar sierra = Sree ti sect mme 338 43939 rnin shee iter iter iter er a Teal — a So ae Sie ie ct Be ee iS Sf Go oe ie a Hu gs Spee “Sect. tet Pei Deo Mine aad Tan Sse ae Ace me cr tt et Sea fem matt mene ‘omc sad fat ree ar ers, err or oe ee Tent Fic eco A Sattar gna Cotte * (Chiov attr ‘Fouts +10080 20 ee caer —— icine a erreur See_ ——_t eigen wn nme a he meee sorbate henpansiadncoave he at pa Pr ret thorny pene a fata mp ray negli te Biot was neve fo eed soo ‘ete ne of ee rn Al ny ce eg ot om oS 2 sagen) 0 ‘Gran 0 kes be bg lem ‘ated pce Tr 09) aS is | segs eta -99 aa nim Ds) 2) Ba earn, 08 = a bared 80 Scare the 2 meetin ae Sat cox 1B 1a vale 8 iss ‘etree a Vetoamagst Seen cama ‘so ip Smo JS. Pisco eer a ea ap me mera sai eer rena eect pone sete - weenie Teen SL sae zaPRON 640 Sapam ne 20 “oe e. ist 0.50708 Seas oa | ron. 64 spe nner 0 aan a0 sim ptt ne wo “nos rengone3 1309) co homie) iss mn ere ert ne eel Serer et RoR gaan 09 “arper ane Scone a0 ‘ioeaegay —_sn _somme, p06 mnt at Ini se) 733900 iar sa See an a oe pare ea som Zo ee ‘sae 00 053) tag Tae ‘Sig Sky aan crm ‘ tel pt wae ree ef rade i oe al ine of than ral Peel na dn fom Bote eh lee cape oreSees PROB 6-44 Suggested answer (i) 230.000 Cashin @30000525128 id Chang st cob 39 13/1331) ous Imlnent baa o0 030 _ ow. Total realized gross profit [Note tha the insalinent method of acounving, recognizes pris ct the porno collections, therefore he realized grass profit is based on the cme PROB. 6-45 Sugpested answer (a) Land 2 {AS 18 sets out five criteria that needed to he met before revere the sae ‘of goods sail be recognized: 1 ihe amounn of revere ean be measured rehab: 2 The seller no longer has management involvement or effec om the goons: 3. The significant “risks and rewards” of owners “from the seller 10 he buyer. 44 Teisprobable that payment for the goods wl! he recesvd by: the iy 5. The coss incurred or to be incurred. in relation 0 the sransaction. can be ‘measured relia ship ave sen transferred