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Prepare the necessary entry to record realized gross profit

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DJ Co. accounts for installment sales on the Installment basis. On january 1, 2016. the ledger accounts included the following balances:

Installment Receivable - 2014 .............................. 36.500

Installment Receivable - 2015 .............................. 155.000

Deferred Gross Pro?t - 2014 .............................. 11.550

Deferred Gross Profit - 2015 .............................. 62.000

In December 31. 2016, account balances before adjustments for realized gross pro?t on installment sales Were:

Installment Receivable . 2014 ..............................none

Installment Receivable .. 2015 .............................. 42.000

lnstailment Receivable . 2016 .............................. 100.500

Deferred Gross Profit - 2014 .............................. 11.550

Deferred Gross Profit - 2015 .............................. 62.000

Deferred Gross Profit - 2016 .............................. 25.610

Installment sales in 2016 were made at 42% above cost of merchandise.

The total realized gross pro?t on installment sales in 2016

Problem 1. Compute the gross profit rate for 2014 and 2015.

Problem 2. Compute the total collection in 2016.

Problem 3. Compute the realized gross profit in 2016. Prepare the necessary entry to record the realized gross profit in 2016.

Reference no: EM132945643

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