PROBLEM 4

On January 2, 2022, Knock Co. sold to Wood Co. an equipment for P890,000.00 costing
P677,625 on installment. Wood Co. paid 5% of the selling price and an old equipment
with trade-in allowance of P176,800.00. The used equipment can be resold for
P230,000.00 after reconditioning cost of P5,200.00. Knock Co. anticipate a 15% gross
profit on the sale of used equipment. Wood Co., issued a 36-month note for the balance
to be paid starting February 1, 2021. However, Wood Co., defaulted payment starting
October 1 2021 and on November 15, 2021 the equipment was repossessed. At the time
of repossession the equipment was appraised at P380,000.00. The company incurred
reconditioning cost of P36,500.00 before the equipment was resold on December 8, 2021
for P490,000.00 cash to Trees Incorporation.

1. Realized Gross Profit on installment sale ended December 31, 2021?

2. Loss on Repossession ended December 31, 2021?
3. Net Income ended December 31, 2021?