Installment Sales - Pretest
Installment Sales - Pretest
1. Oro Company began operations on January 1, 2012 and appropriately uses the
installment sales method of accounting. The following data are available for
2012 and 2013:_____________________________________________________
Installment sales P1,500,000 P1,800,000
Gross profit on sales 30% 40%
Cash collections from:
2012 sales 500,000 600,000
2013 sales - 700,000
The realized gross profit is ______________________.
2. Roco Corp., which began business on January 1, 2013, appropriately uses the
installment sales method of accounting for income tax reporting purposes. The
following data are available for 2013:______________________
Installment accounts receivable, 12/31/13 P200,000
Installment sales for 2013 350,000
Gross profit on sales 40%
Under the installment method, what would be Roco’s deferred gross profit at
December 31, 2013? ____________________
3. Gray Co., which began operations on January 1, 2013, appropriately uses the
installment method of accounting. The following information pertains to Gray
operations for the 2013:_______________________________
Installment sales P500,000
Regular sales 300,000
Cost of installment sales 250,000
Cost of regular sales 150,000
General and administrative expenses 50,000
Collections on installment sales 100,000
In its December 31, 2013 statement of financial position, what amount should
Gray report as deferred gross profit? ___________________
4. Quincy Enterprises uses the installment method of accounting and has the
following data at year-end:___________________________
Gross margin on cost 66 2/3%
Unrealized gross profit P192,000
Cash collections including down payments 360,000
What was the total amount of sale on installment basis? ___________________
5. Laya Co., which began operations on January 2, 2013, appropriately uses the
installment sales method of accounting. The following information is available
for 2013:______________________________________________________________
Installment accounts receivable, December 31, 2013 P800,000
Deferred gross profit, December 31, 2013
(before recognition of realized gross profit for 2013) 560,000
Gross profit on sales 40%
For the year ended December 31, 2013, realized gross profit on sales should be
___________________.
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PRACTICAL ACCOUNTING 2 (SY 2017-2018) – INSTALLMENT SALES
6. The total realized gross profit on prior year sales on December 31, 2013 is
_________________.
7. The gain(loss) from the sale of the repossessed appliance is
_________________.
8. Kiko Co. began operations on January 1, 2013 and appropriately uses the
installment method of accounting. The following information pertains to Kiko’s
operations for 2013:_____________________________
Installment sales P800,000
Cost of installment sales 480,000
General and administrative expenses 80,000
Collections on installment sales 300,000
The balance in the deferred gross profit account at December 31, 2013 should
be ____________________.
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