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    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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    https://brainmass.com/economics/output-and-costs/newton-co-installment-sales-cost-393493

    Solution Preview

    (a)
    300,000 / 1,000,000 = 30% rate of gross profit on 2010 installment sales.

    (b)
    ACCOUNT:
    Repossessed ...

    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.

    $2.19

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