FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Q: How is ARR calculated?
A: ARR: Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a…
Q: Define value chain.
A: Value Chain: Value Chain is the combination of activities including all the costs to do such…
Q: Write the two types of compounding situations?
A: Interest is characterized as the getting cash cost, as on account of premium charged on equalization…
Q: Explain NAREIT Index?
A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…
Q: Explain put–call parity relationship
A: Put-Call parity is the concept that defines the relationship between price of European call option…
Q: What would be the equasion for solving this
A: Formula for calculating yearly payment: Yearly payment=(Loan amount * Rate%)1-1(1+Rate%)n
Q: What is a limit order?
A: Limit order It is such an order to buy or trade a security at or superior to a predefined cost. The…
Q: Consider REMICs?
A: A real estate mortgage investment conduit (REMIC) is a difficult puddle of mortgage securities…
Q: Explain rebalance
A: Rebalancing is the strategy for realigning portfolio weightings. Rebalancing incorporates buying or…
Q: What is GAAP and how does it work
A: The accounting is based on various principles that are defined by GAAP or IFRS.
Q: What is alpha transfer?
A: The term ‘Alpha’ refers to the active return on investment. In other words, the excess return from…
Q: Define asymmetric hedge
A: A strategy that helps to reduce the loss which occurs from the movement of the asset's price is term…
Q: Can you explain DCF model?
A: Introduction Discounted cash flows: DCF is abbreviated as discounted cash flows. The concept of…
Q: What is the DCF method?
A: DCF is a complex tool for valuation which approximates the value of any investment depending upon…
Question

with solution

On November 1, 20x1, Auto Motors, which maintains a perpetual inventory records sold a new automobile to Speed for P6,800,000. The cost of the car to the seller is P5,205,000. The buyer paid 30% down payment and received a P640,000 allowance on an old car traded, the balance being payable in equal monthly installments commencing the month of sale. The monthly amortization was P240,000 inclusive of 12% interest on the unpaid amount of the obligation. The car traded-in has a wholesale value of P960,000 after expending reconditioning cost of P180,000. After paying three (3) installments, the buyer defaulted, and the car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1 CASE 4 Motorista, Inc. manufactures jeeps and sells them in installments. Information presented relates to Motorista's operations for the last three (3) calendar years: 20x3 20x2 20x1 Cost of installment sales Gross profit on installment P8,765,625 32% 30% 28% Outstanding deferred gross profit, Dec. 31 20x3 sales P3,113,000 907,500 20x2 sales 20x1 sales 2,516,250 423,500 1,347,500 No repossessions were made during the year. REQUIRED: 8. Total collections in 20x3 9. Total realized gross profit in 20x3 10. Installment receivable balance as of 20x3
expand button
Transcribed Image Text:On November 1, 20x1, Auto Motors, which maintains a perpetual inventory records sold a new automobile to Speed for P6,800,000. The cost of the car to the seller is P5,205,000. The buyer paid 30% down payment and received a P640,000 allowance on an old car traded, the balance being payable in equal monthly installments commencing the month of sale. The monthly amortization was P240,000 inclusive of 12% interest on the unpaid amount of the obligation. The car traded-in has a wholesale value of P960,000 after expending reconditioning cost of P180,000. After paying three (3) installments, the buyer defaulted, and the car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P2,400,000. REQUIRED: 5. Gross profit rate in 20x1 6. Total collections in 20x1 7. Realized gross profit on installment sales during 20x1 CASE 4 Motorista, Inc. manufactures jeeps and sells them in installments. Information presented relates to Motorista's operations for the last three (3) calendar years: 20x3 20x2 20x1 Cost of installment sales Gross profit on installment P8,765,625 32% 30% 28% Outstanding deferred gross profit, Dec. 31 20x3 sales P3,113,000 907,500 20x2 sales 20x1 sales 2,516,250 423,500 1,347,500 No repossessions were made during the year. REQUIRED: 8. Total collections in 20x3 9. Total realized gross profit in 20x3 10. Installment receivable balance as of 20x3
The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2: Debit P150,000 2,000,000 700,000 5,550,000 30,000 Credit Installment receivable – 20x1 Installment receivable – 20x2 Inventory, December 31, 20x1 Purchases Repossession Installment sales Regular sales Deferred gross profit – 20x1 Operating expenses P4,250,000 3,850,000 540,000 1,250,000 Additional information: Installment receivable – 20x1 as of December 31, 20x1 is P1,200,000. Inventory of new and repossessed merchandise as of December 31, 20x2 is P950,000. Gross profit percentage of regular sales during the year is 30% based on sales. Repossession was made during the year. It was a 20x1 sale, and the corresponding uncollected account at the time of repossession is P77,500. REQUIRED: 11. Total collections in 20x2 12. Gross profit rate on installment sales for 20x2 13. Loss on repossession 14. Total realized profit on installment sales, net of loss on repossession in 20x2 15. Net income for 20x2
expand button
Transcribed Image Text:The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2: Debit P150,000 2,000,000 700,000 5,550,000 30,000 Credit Installment receivable – 20x1 Installment receivable – 20x2 Inventory, December 31, 20x1 Purchases Repossession Installment sales Regular sales Deferred gross profit – 20x1 Operating expenses P4,250,000 3,850,000 540,000 1,250,000 Additional information: Installment receivable – 20x1 as of December 31, 20x1 is P1,200,000. Inventory of new and repossessed merchandise as of December 31, 20x2 is P950,000. Gross profit percentage of regular sales during the year is 30% based on sales. Repossession was made during the year. It was a 20x1 sale, and the corresponding uncollected account at the time of repossession is P77,500. REQUIRED: 11. Total collections in 20x2 12. Gross profit rate on installment sales for 20x2 13. Loss on repossession 14. Total realized profit on installment sales, net of loss on repossession in 20x2 15. Net income for 20x2
Expert Solution
Check Mark
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
See solutionCheck out a sample Q&A here
Step 1
VIEW
Step 2
VIEW
Step 3
VIEW
bartleby

Step by stepSolved in 3 steps

See solution
Check out a sample Q&A here
Blurred answer
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
SEE MORE TEXTBOOKS