Reference no: EM132983935

Questions -

Q1. Home Co. reported deferred gross profit of 200,000 and 60,000 at the beginning and end of the year, respectively. Home Co. consistently made sales at a 25% gross profit rate. how much were the total collections during the year?

a. 480,000

b. 560,000

c. 580,000

d. 620,000

Q2. BAUTISTA CO. on September 30, 20x1 sold for 48,000 a piano costing 30,000. The downpayment was 4,800 and an equal amount was to be paid at the end of each succeeding month. Monthly interest of 1% yield rate was to be charged on the unpaid balance of the installment contract, with payment applying first to accrued interest and the balance to principal. After paying a total of 19,200, the customer defaulted and the piano was correspondingly repossessed on February 28, 20x2 at which time it was estimated to have a value of 16,800 on a depreciated cost basis. BAUTISTA co. uses a perpetual inventory system and records the total deferred gross profit at the time of sale

How much was the realized gorss profit at the end of 20x1?

a. 7,200

b. 7,039

c. 6,763

d. 6,489

Q3. How much was the gain or loss on the repossession in 20x2?

a. 1,928

b. 1,867

c. 2,124

d. 1,678