Charter Corporation, which began business in 2013, appropriately uses the instal
ID: 2369771 • Letter: C
Question
Charter Corporation, which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2013 and 2014:
2013
2014
Installment sales
$
560,000
$
550,000
Cost of installment sales
392,000
467,500
Cash collections on installment sales during:
2013
170,000
125,000
2014
Charter Corporation, which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2013 and 2014:
Explanation / Answer
2013 installament slaes
installament recievable = 560000
inventory = 392000
deffered gross profit = 560000-392000 =168000
2013 cash collection
installaments recievable = 170000
similarly do for year 2014