INSTALLMENT

1. Time of sale – fully recovered & fully recognized

No RGP for the next year!
a. Sales xx
Less: COS (xx)
GP xx  Total realized profit for the year of sale.

2. Cost recovery method – no profit unless fully recovered

a. RGP
COS xx
Less: Collection (xx)  dapat mas dako para makarecord hin profit
Profit xx

b. DGP
DGP, beg xx
Less: Collection (xx)
DGP, end xx

c. Uncovered Cost
COS xx
Less: Collection (xx)
2023 xx
Less: Collection (xx)
2024 xx

3. Profit realization method – “collection for profit”

a. RGP – an imo nacollect
b. DGP
RGP xx
2023 (xx)
DGP xx
2024 xx
DGP xx

4. Installment method
a. Collection x GP% = RGP
Installment Sales xx DGP xx
Installment Cost (xx) Less: Installment Rec. (xx)
Installment GP xx GP rate xx

b. DGP xx
Less: RGP (xx)
DGP, end xx

RGP xx
Collection
Cost xx
 INSTALLMENT

Installment Sales xx
Less: Collection (xx)
Receivable Balance xx

Cash sales – RGP – point of sales

Installment Sales – RGP

Based on cost 125%

Sales 125%
Cos 100%
GP 25%

Based on sale x25/125

Sales 100%
Cos 75%
GP 25%

1. Repossession:
* buyer fail to pay
* seller as remedy to the buyer who fail to pay will appropriate the asset

Cost xx
Less: FV of the repossessed item (xx)
Gain or Loss xx

Cost = Cost of Installment Receivable x cost ratio

FV = Resale value – reconditioning cost – cost to sell – normal profit

Repossessed Entry:
Inventory (Resale-reconditioning cost- cost to sell- normal profit) xx
Loss on repossessed (defaulted amount x GP rate) xx
DGP (balancing) xx
IAR (defaulted amount) xx

IAR, beg. Xx
IAR, end (xx)
Collection xx
Account Defaulted (xx)
Total xx
GP rate x%
RGP xx

Trade-in – collection includes non-monetary

Down payment xx
Trade-in xx
Any Installment collection xx
Collection xx