Installment-sales method calculations-entries

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(Installment-Sales Method Calculations, Entries) Mandarin Partners appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2014 and 2015.

                                                          2014                            2015

Installment sales                            $300,000                     $750,000

Cost of installment sales                 255,000                        660,000

Cash collections on 2014 sales        70,000                        201,000

Cash collections on 2015 sa                -0-                         216,000

Instructions

(a) Compute the amount of realized gross profit recognized in each year.

(b) Prepare all journal entries required in 2015.

Reference no: EM13765319

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