(Installment Sales Computations and Entries) Presented below is summarized information for Johnston Co., which sells merchandise on the installment basis.
|
2012 |
2013 |
2014 |
|
|
Sales (on installment plan) |
$250,000 |
$260,000 |
$280,000 |
|
Cost of sales |
155,000 |
163,800 |
182,000 |
|
Gross profit |
$ 95,000 |
$ 96,200 |
$ 98,000 |
|
Collections from customers on: |
|||
|
2012 installment sales |
$75000 |
$100,000 |
$ 50,000 |
|
2013 installment sales |
100,000 |
120,000 |
|
|
2014 installment sales |
100,000 |
Instructions
(a) Compute the realized gross profit for each of the years 2012, 2013, and 2014.
(b) Prepare in journal form all entries required in 2014, applying the installment sales method of accounting.