Student Name:
Class:
Requirement 1:
2016 Cost recovery %:
$180,000
$300,000 = 60% =40% Correct!
Requirement 2:
Date Account Debit Credit
2016 300,000 Correct!
180,000
120,000
2017 400,000 Correct!
To record cash collections from installment sales
To recognize gross profit from installment sales
Inventory
Deferred gross profit
Cash
Installment receivables
Deferred gross profit
To record cash collections from installment sales
To recognize gross profit from installment sales
To record installment sales
Cash
Installment receivables
Deferred gross profit
Realized gross profit
Installment receivables
Installment receivables
Inventory
Deferred gross profit
Gross profit %
2017 Cost recovery %:
Instructor
Problem 05-19
McGraw-Hill/Irwin
To record installment sales
$280,000
Gross profit %
Cash collection from 2017 sales
Cash collection from 2016 sales
Cash collection from 2016 sales
2017 Gross Profit:
2016 Gross Profit:
Requirement 3:
Cash
Collected Gross Profit
$120,000 0 Correct!
Date Account Debit Credit
2016 300,000 Correct!
2017 400,000 Correct!
Deferred gross profit
Inventory
Installment receivables
Realized gross profit
Deferred gross profit
Installment receivables
Cash
Inventory
Cash
Deferred gross profit
Installment receivables
2016 sales
2016
Cost Recovery
$120,000
Date
Installment receivables
$210,000
2017 totals
2017
Given Data P05-19:
AJAX COMPANY
Sales
Student Name:
Class:
Requirement 1:
200,000$ «- Correct!
Requirement 2:
Point of Delivery Installment Sales Cost Recovery
Debit Credit Debit Credit Debit Credit
500,000 «- Correct!
500,000 «- Correct!
300,000 «- Correct!
300,000 «- Correct!
100,000 100,000 100,000 «- Correct!
100,000 100,000 100,000 «- Correct!
Installment received
Cost of goods sold
Inventory
To record sale on 8/31/13
Installment receivable
To record cash collections (entry made each Aug. 31)
Inventory
Deferred gross profit
To record sale on 8/31/13
Deferred gross profit
Realized gross profit
To record gross profit (Entry made 8/31/16 and 8/31/17)
To record gross profit (Entry made each Aug. 31)
Deferred gross profit
Realized gross profit
Account
Installment receivable
Problem 05-20
McGraw-Hill/Irwin
Sales revenue
Instructor
Gross Profit Recognized
SILVA COMPANY
SILVA COMPANY
General Journal
Total profit
Installment sales method: Gross profit %
Cost recovery method
Installment sales method
Point of delivery method
Cash collections
Student Name:
Class:
Problem 05-20
McGraw-Hill/Irwin
Instructor
Requirement 3:
Point of Installment Cost
Delivery Sales Recovery
400,000 400,000 400,000
Partial Balance Sheet
Installment receivable
Assets
SILVA COMPANY
December 31, 2016
December 31, 2017
Installment receivables, net
Installment receivables, net
Less: Deferred gross profit
Assets
Less: Deferred gross profit
500,000$
Given Data P05-20:
SILVA COMPANY
Merchandise sold
Book value of merchandise
Annual installments (4)
Down payment