Dong Electronics makes all of its sales on credit and accounts for them using

the installment sales method. For simplicity, assume that all sales occur on the
first day of the year and that all cash collections are made on the last day of
the year.

Dong Electronics charges 18% interest on the unpaid installment balance.

Data for 2015 and 2016 are as follows:

2015 2016

Sales 300,000 150,000

Cost of goods sold 20,000 40,000

Cash collections (principal and interest)

2015 sales 15,000 50,000

2016 sales 90,000

The interest income recognized in 2016 amounted to: