Newton Co. had installment sales of $1,000,000 and cost of i
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Installment sales.
Newton Co. had installment sales of $1,000,000 and cost of installment sales of $700,000 in 2010. A 2010 sale resulted in a default in 2012, at which time the balance of the installment receivable was $30,000. The repossessed merchandise had a fair value of $15,000.
Instructions
(a) Calculate the rate of gross profit on 2010 installment sales.
(b) Make the entry to record the repossession.
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Solution Summary
Newton Co. had installment sales of $1,000,000 and cost of installment sales of $700,000 in 2010. A 2010 sale resulted in a default in 2012, at which time the balance of the installment receivable was $30,000. The repossessed merchandise had a fair value of $15,000.
Solution Preview
(a)
300,000 / 1,000,000 = 30% rate of gross profit on 2010 installment sales.
(b)
ACCOUNT:
Repossessed ...
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