Reference no: EM132571181

The trial balance of PULSIFER Appliance Corporation as of the end of the fiscal year on September 30, 2018

...............................................................DEBIT.....................................CREDIT.

Accounts Receivable...................................P 100,000......................................0.

Accounts Payable......................................................................................................P 100,000.

Accumulated Depreciation .........................................................................................33,750

Capital Stock.....................................................................................................................125,000

Cash.......................................................................................46,250......................................0.

Deferred Gross Profit - 2017..........................................0.........................................50,000.

Equipment..........................................................................112,500........................................0.

Installment Contract Receivable - 2017................12,500........................................0.

Installment Contract Receivable - 2018..............150,000.......................................0.

Installment Sales....................................................................0........................................375,000.

Inventory, September 30, 2017..................................62,500........................................0.

Loss on Repossessions.................................................3,750...........................................0.

Prepaid Expenses.............................................................3,750...........................................0.

Purchases........................................................................435,000..........................................0.

Repossessions...................................................................2,500...........................................0.

Retained Earnings................................................................0...........................................30,000.

Sales............................................................................................0.........................................312,500.

Selling and Administrative Expenses.......................9,750...........................................0.

.........................................................................................P 1,026,250..................................P 1,026,250.

The post-closing trial balance on September 30, 2017 shows the following balances of certain accounts:

Installment Contract Receivable - 2017......................................P 100,000

Deferred Gross Profit - 2017..................................................................50,000

The gross profit percentage on regular sales during the year was 30%

The accountant made the following entry for repossession on a sale of 2017 towards the end of the fiscal year:

Repossessions......................................................2,500.

Loss on Repossessions....................................3,750.

Installment Contract Receivable - 2017..............6,250.

The inventory of new and repossessed merchandise on September 30, 2018 amounted to P 75,000

REQUIRED:

Question 1. What is the gross profit rate for 2017 and 2018 installment sales?

Question 2. What is the gross profit realized in 2018 from 2017 installment sales?

Question 3. The gross profit realized on collections for installment sales in fiscal year 2018 is

Question 4. The correcting entry for repossessions made on sale of 2017 is

Question 5. How much is the total realized gross profit after gain or (loss) on repossession to be reported in September 30, 2018?