INSTALLMENT SALES

PROBLEM 1

Collection from 2019:

600, 000 x 30% = 180, 000
Collection from 2020:
700, 000x 40%= 280, 000
Realized Gross Profit 460, 000
 PROBLEM 2
Cost of Installment Sales 250, 000
Divided by: Installment Sales 500,000
Gross Profit Rate 50%
Installment Sales 500,000
Less: Collections 100, 000
400, 000
X 50%
Deferred Gross Profit 200, 000
 PROBLEM 3
Gross Profit on Regular Sales 300, 000
Realized Gross Profit (200, 000 x .50%) 100, 000
Total 400,000
Gen.Admin.Expense (100, 000)
Net Income 300, 000
 PROBLEM 4
Sales 60, 000
Collections (35, 000)
Uncollectible (5, 000)
Balance 20, 000
X 30%
Deferred Revenue 6, 000
 PROBLEM 5

2019 2020
Sales 1, 000, 000 2, 000, 000
Collections (500, 000) (500, 000)
(300, 000) _____________
200, 000 1, 500, 000 = 1, 700, 000
 PROBLEM 6
Sales 900, 000
Cash Paid (150, 000)
Installment (250, 000)
Balance 500, 000
X 30%
DGP 150, 000
 PROBLEM 7
Installment A/R Beginning 755, 000
Installment Sales 950, 000
Installment A/R, ending (840, 000)
Collection 865, 000
X 45%
Realized gross profit 389, 250
 PROBLEM 8

Installment A/R, Ending 840, 000

Gross Profit Rate x 45%
DGP 378, 000
 PROBLEM 9

Notes 2, 000, 000

Less: Fair Value 1, 150, 000
Loss 850, 000
 PROBLEM 10
Notes 2,000,000
Cost Ratio (1,440/2,400) 60%
Cost 1,200,000
Fair Value (1,150,000)
Loss on Repossession 50,000
 PROBLEM 11
2020 2019 2018
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, 500
 
 TOTAL RGP 3, 044, 250
 PROBLEM 12

(9, 728, 125 x 32%) + (3, 025 x 30%)

= 4, 020, 500
 PROBLEM 13

Installment Sales 425, 000

 Merchandise Inventory, beginning 70, 000
Purchases 555, 000
Merchandise Inventory, Ending (92, 000)
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 (161,500/425,000) 38%

 
 PROBLEM 13

Gross Profit Rate 2019= 54, 000/120, 000= 45%

2020 2019
425, 000 120, 000
(200, 000) (15, 000)
(7, 200)
225, 000 97, 800
X 38% x 45%
RGP 85, 500 44, 010 129, 510
 PROBLEM 14

Regular Installment Sales 115, 500

Installment Sales 129, 510
245, 010
 PROBLEM 15

Collection from 2019:

240, 000 x 25%/125% = 48,000
Collection from 2020:
160, 000x 20%/120%= 26, 667
Realized Gross Profit 74, 667
 PROBLEM 16
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, 0000)
COST (60, 000) 50, 000
Gross Profit 15, 000 x 10%
GPR 20% MONTHLY 5, 000
 PROBLEM 16

Down Payment 5, 000

NRV 20, 000
Monthly Collection 15, 000
Total Collection 40, 000
x 20%
Realized 8, 000
 PROBLEM 17
2019= 40%
 
2020 2019
1, 500 1, 200
(900) (630)
(450)
(24)
600 96
X 30% x 40%
180, 000 38, 400 218, 400
 
 PROBLEM 18
2020 2019
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/
166, 500 114, 500
= 45% = 44%
 PROBLEM 18

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
 PROBLEM 19
Sales Price P1,650
Cost 924
Gross Profit 726
GPR (726/1,650) 44%

Realized (220X44%) P96.8

 PROBLEM 20
Sales Price P1,000
Cost (460+60) 520
Gross Profit 480
GPR (480/1,000) 48%

Realized (250X48%) P120

 PROBLEM 21

Down Payment 35, 000

NRV 81, 700
Monthly Collection 20, 000
Total Collection 136, 700
x 24%
Realized 32, 808
END!