Reference no: EM132784922

Dipolog Company sells appliances on the installment basis. Below are information for the past three years:

                                                                       2008              2007           2006

Installment sales ------------------ P750,000           P600,000    P400,000

Cost of sales ----------------------- 450,000         375,000      260,000

Collections on:

2008 installment sales --- 275,000

2007 installment sales --- 180,000 240,000

2006 installment sales --- 125,000 120,000 150,000

Repossessions on defaulted accounts included one made on a 2008 sale for which the unpaid balance amounted to P5,000. The depreciated values of the appliance repossesed was P2,500.

problem 1: The realized gross profit in 2008 on collections of 2008 installment sales was:

a. P108,000         c. P221,250

b. 110,000           d. 221,600