Reference no: EM132571171
The partial trial balance of ANATHEMA Company is presented below for December 31, 2016
Accounts Receivable............................................P 34,000
Installment Accounts Receivable, 2016..........192,000
Installment Accounts Receivable, 2015...........90,000
Installment Accounts Receivable, 2014...........22,000
Merchandise Inventory............................................48,000
Purchases...................................................................238,000
Freight-in.........................................................................12,000
Repossessed Merchandise...................................14,000
Selling Expenses.......................................................92,000
Loss on Repossession, 2016...............................16,000
Loss on Repossession, 2014................................8,000
Doubtful Accounts - Charge Sales....................1,000
Cash Sales..................................................................60,000
Charge Sales............................................................120,000
Installment Sales...................................................300,000
Unrealized Gross Profit, 2015...........................56,000
Unrealized Gross Profit, 2014...........................32,000
Additional information:
• Merchandise inventory on December 31, 2016 (including new and repossessed merchandise) was P 52,000
• Charge sales prices and installment sales prices were higher than cash sales prices by 20% and 25%, respectively.
• Installment sales in 2014 and 2015 had gross profit rates of 40% and 35%, respectively.
• The following is the summary of the repossession account on December 31, 2016
Year of Sale..........FMV of Merchandise.......Loss......Installment Contracts Receivable
2014....................................P 2,000....................P 8,000.................P 10,000
2015.......................................12,000.......................16,000.....................28,000
.............................................P 14,000...................P 24,000................P 38,000
• The unrealized gross profit balances shown above were the amounts as of January 1, 2016 and were not adjusted during the year
REQUIRED:
Question 1. The total sales for 2016, if all sales were on cash basis:
Question 2. The cost of goods sold on installment sales for 2016 should be:
Question 3. What is the gross profit rate in 2016?
Question 4. Total collection in 2016 from 2014 and 2015 sales should be:
Question 5. The total realized gross profit on installment sales before gains or losses on repossession in 2016 should be:
Question 6. How much is the adjusted loss on repossession in 2016 from 2014 and 2016 repossession:
The net income (loss) for the year 2016 should be