Sales Under the Installment Method Anibonita Company began operations in 2007. It sells goods on installment sales contracts; these transactions are considered to be exceptional, so it uses the installment method to recognize gross profit. The following is a summary of the installment sales, costs of installment sales, operating expenses, and collections for 2007 and 2008:
|
2007 |
2008 |
|
|
Installment method sales |
$80,000 |
$90,000 |
|
Costs of installment method sales |
52,000 |
59,400 |
|
Operating expenses |
13,000 |
15,000 |
|
Cash collections from |
||
|
2007 installment method sales |
42,000 |
21,000 |
|
2008 installment method sales |
41,000 |
Required
Using the installment method to recognize gross profits, prepare 2007 and 2008 condensed income statements for the Anibonita Company.