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Installment Sales

1. The document provides examples of calculating gross profit from installment sales using percentages. Realized gross profit was calculated as 460,000. 2. Deferred gross profit is calculated as 50% of the remaining balance of installment sales. Deferred gross profit was calculated as 200,000. 3. Total net income is calculated by combining realized gross profit, general administrative expenses, and gross profit from regular sales. Net income was calculated as 300,000.

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Michael Bongalonta
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81 views13 pages

Installment Sales

1. The document provides examples of calculating gross profit from installment sales using percentages. Realized gross profit was calculated as 460,000. 2. Deferred gross profit is calculated as 50% of the remaining balance of installment sales. Deferred gross profit was calculated as 200,000. 3. Total net income is calculated by combining realized gross profit, general administrative expenses, and gross profit from regular sales. Net income was calculated as 300,000.

Uploaded by

Michael Bongalonta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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INSTALLMENT SALES

PAS 18/PFRS 15
1.
600, 000 x 30% = 180, 000
700, 000x 40% = 280, 000
Realized Gross Profit 460, 000
2.
Cost of Installment Sales 250, 000
/ Installment Sales 500,000
50%
Installment Sales 500,000
Less: Collections 100, 000
400, 000
X 50%
Deferred Gross Profit 200, 000
3. Gross Profit on Regular Sales 300, 000
Realized Gross Profit
(200, 000 x .50%) 100, 000
400, 000
Gen.Admin.Expense (100, 000)
Net Income 300, 000
4. Sales 60, 000
Collections (35, 000)
Uncollectible (5, 000)
20, 000
X 30%
Def.Rev. 6, 000
 5.
2009 2010
Sales 1, 000, 000 2, 000, 000
Collections (500, 000) (500, 000)
(300, 000)
200, 000 1, 500, 000 = 1, 700, 000

6.

Sales 900, 000


Cash Paid (150, 000)
Installment (250, 000)
500, 000
X 30%
DGP 150, 000
7.
Installment A/R Beginning 750, 000
Installment Sales 950, 000
Installment A/R, ending (840, 000)
865, 000
X 45%
Realized gross profit 389, 250

8.
Installment A/R, Ending 840, 000
Gross Profit Rate x 45%
DGP 387, 000
9.
2, 000, 000 - 1, 150, 000 = 850, 000 loss

10.
50, 000 loss

11. 2010 2009 2008


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, 000
 
RGP 3, 044, 250
12.
(9, 728, 125 x 32%) + (3, 025 x 30%) = 4, 025, 000
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 2009 = 54, 000/120, 000 = 45%

2010 2009
425, 000 120, 000
(200, 000) (16, 000)
(7, 200)
225, 000 97, 800
X 38% x 45%
85, 500 44, 010
 
RGP 129, 510
14.
Regular Installment Sales 115, 500
Installment Sales 129, 510
245, 010
15.
(74, 667)

16.
16, 080
17.
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, 000)
COST (60, 000) 20% 50, 000
Gross Profit 15, 000 x 10%
MONTHLY 5, 000

(5,000 + 20,000 + 15,000) = 40,000 x 20% = 8,000


18. 3, 740 DECREASE
19.
2009= 60%
2010 2009
1, 500 1, 200
(900) (630)
(450)
(24)
600 96
X 30% x 40%
180, 000 + 38, 400 = 218, 400

 
 
20.
2010 2009
Cash Sales 37, 000 27, 000
Installment Sales 330, 000 235, 000
Total Sales 367, 000 262, 000
Total Cost
Merchandise Inventory, beg45, 500
Purchases 215, 000 193, 000
Merchandise Inventory, end(60, 000) (45, 500)
200, 500/ 147, 500/
167, 500 114, 500
= 45% = 44%
 
20.

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

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