Charter Corporation, which began business in 2013, appropriately uses the instal
ID: 2507711 • 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 $ 440,000 $ 430,000
Cost of installment sales 374,000 387,000
Cash collections on installment sales during: 2013 190,000 125,000 2014 120,000
Required: 1. How much gross profit should Charter recognize in 2013 and 2014 from installment sales? 2. What should be the balance in the deferred gross profit account at the end of 2013 and 2014?
Explanation / Answer
http://www.scribd.com/doc/49391810/Ch-5-solution
just apply the formulae...this is so simple