Compute the following cash collection cost recovery gross

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Ajax Company appropriately accounts for certain sales using the installment sales method. The perpetual inventory system is used. Information related to installment sales for 2013 and 2014 is as follows: 2013 2014 Sales $ 370,000 $ 470,000 Cost of sales240,500 282,000 Customer collections on: 2013 sales 155,000 135,000 2014 sales 185,000 Required: 1. Calculate the amount of gross profit that would be recognized each year from installment sales. 2.1Prepare all necessary journal entries for the year 2013. 2.2Prepare all necessary journal entries for the year 2014.  Assume that Ajax uses the cost recovery method to account for its installment sales. 3.1 Compute the following: cash collection cost recovery gross profit 2013 sale 2013 sale 2014 sale 2014 total 3.2 Prepare all necessary journal entries for the year 2013.3.3 Prepare all necessary journal entries for the year 2014.

Reference no: EM13570280

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