Reference no: EM132731141
Problem 1- Coffin Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2019 and 2020. In 2019, show the installment sales $900,000, cost of installment sales $594,000, cash collection on 2019 sale $370,000. In 2020, show the installment sales $1,000,000, cost of installment sales $680,000, cash collection on 2019 sale $350,000, and cash collection on 2020 sale $450,000. What is gross profit recognized in 2020?
a) $262,000
b) $263,000
c) $264,000
d) $265,000
Problem 2- Coffin Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2019 and 2020. In 2019, show the installment sales $900,000, cost of installment sales $594,000, cash collection on 2019 sale $370,000. In 2020, show the installment sales $1,000,000, cost of installment sales $680,000, cash collection on 2019 sale $350,000, and cash collection on 2020 sale $450,000. What are not entries in 2020?
a) Debit Installment Accounts Receivable 1,000,000, and Credit Installment Sales Revenue 1,000,000
b) Debit Cost of Installment Sales 680,000, and Credit Inventory 680,000
c) Debit Deferred Gross Profit 263,000, and Credit Realized Gross Profit 263,000
d) Debit Installment Sales Revenue 1,000,000, and Credit Cost of Installment Sales 1,000,000