[P2] INSTALLMENT SALES - CHAPTER 2 INSTALLMENT SALES...

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CHAPTER 2 INSTALLMENT SALES DETERMINING GROSS PROFIT RATIO Prior Year(s) Sale GP % = Deferred Gross Profit, beginning Installment A/R, beginning Current Year GP % = Installment Sales - COIS NET Installment Sales for the year With trade-in: Installment sales xx Over-allowance (xx) Under-allowance xx Net Instalment sales xx Cost of Installment sales (xx) Gross Profit xx ALLOCATION OF COST OF GOODS SOLD - Allocation of COGS from cash sales, charge sales and instalment sales Computation of COGS to be allocated: MI, beg Add: Purchases Freight in Repossessed Merchandise (TRUE WORTH) xx xx xx xx xx COGAS Less: MI, end xx xx COGS to be Allocated xx xx CASE 1: Same selling price for all types: PRORATE ACCORDING TO RATIO OF SALE TO TOTAL SALE Type of Sale Amount COGS (a) Ratio (b) Allocated Cost (a x b) Cash Charge (A/R) Installment (COIS) xx 1 xx 2 xx 3 xx xx xx xx 1 / xx xx 2 /xx xx 3 /xx xx xx xx Total xx xx CASE 2: Higher selling price for Charge and Installment Type of Sale Amount Amount Based on Cash Sales (a)
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