# SCh05 - Student Name Andrew Yount Class McGraw-Hill/Irwin...

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Student Name: Andrew Yount Class: McGraw-Hill/Irwin Problem 05-19 Requirement 1: 2016 Cost recovery %: \$180,000 \$300,000 = 60% Gross profit % = 40% 2017 Cost recovery %: \$280,000 \$400,000 = 70% Gross profit % = 30% 2016 Gross Profit: Cash collection from 2016 sales = \$120,000 X 40% = \$48,000 2017 Gross Profit: Cash collection from 2016 sales = \$100,000 X 40% = \$40,000 Cash collection from 2017 sales = \$150,000 X 30% = \$45,000 Total 2017 gross profit \$85,000 Requirement 2: Date Account Debit Credit 2016 Installment receivables 300,000 Correct! Inventory 180,000 Deferred gross profit 120,000 To record installment sales Cash 120,000 Installment receivables 120,000 Correct! To record cash collections from installment sales Deferred gross profit 48,000 Realized gross profit 48,000 Correct! To recognize gross profit from installment sales 2017 Installment receivables 400,000 Correct! Inventory 280,000 Deferred gross profit 120,000 To record installment sales Cash 250,000

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Installment receivables 250,000 Correct! To record cash collections from installment sales Deferred gross profit 85,000 Realized gross profit 85,000 Correct! To recognize gross profit from installment sales

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• Spring '14
• Accounting, Generally Accepted Accounting Principles, \$48,000, \$45,000, \$280,000

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