January 31, 2015

Homework Help: accounting

Posted by weeli on Saturday, December 11, 2010 at 2:51am.

Houser Appliances accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/12.

Cash $45,000
Installment accounts receivableó2010 20,000
Installment accounts receivableó2011 50,000
Installment accounts receivableó2012 90,000
Inventory 27,400
Repossessed merchandise 4,600
Accounts payable $ 37,600
Deferred gross profitó2010 12,000
Deferred gross profitó2011 26,400
Common stock 125,000
Retained earnings 10,000
Installment sales 120,000
Cost of installment sales 78,000
Loss on repossessions 3,000
Operating expenses 13,000
$331,000 $331,000

Additional information:
2010 gross profit rate: 25%
Total cash receipts during 2012: $118,000
Merchandise sold in 2011 was repossessed in 2012 and the following entry was prepared:

Deferred Gross Profitó2011 2,400
Repossessed Merchandise 4,600
Loss on Repossessions 3,000
Installment Accounts Receivableó2011 10,000

(a) What is the gross profit rate for 2011? Show supporting computations.
(b) What is the gross profit rate for 2012? Show supporting computations.
(c) Of the total cash receipts in 2012, how much represents collections from installment sales of: (Show supporting computations.)
(1) 2010?
(2) 2011?
(3) 2012?
(d) What is the total realized gross profit in 2012? Show supporting computations.

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