(Installment Sales Method Calculations, Entries) Coffin Corporation appropriately uses the installment sales method of accounting to recognize income in its financial statements. The following information is available for 2012 and 2013.
|
2012 |
2013 |
|
|
Installment sales |
$900,000 |
$1,000,000 |
|
Cost of installment sales |
594,000 |
680,000 |
|
Cash collections on 2012 sales |
370,000 |
350,000 |
|
Cash collections on 2013 sales |
–0– |
450,000 |
Instructions
(a) Compute the amount of realized gross profit recognized in each year.
(b) Prepare all journal entries required in 2013.