Flr, GF Partners Bldg, 139 H.V. dela Costa, Salcedo Village, Makati City
Flr. EPCIB Bldg. 2070 Claro M. Recto, Manila
Practical Accounting 2
Prof. Cecilla Mercado
Diamante Motors sells locally manufactured jeeps on installments. Information presented
below relates to Diamante’s operations for the last three calendar years.
Cost of installment sales
Gross profit on installment sales
Outstanding installment rec’l, Dec. 31:
From 2003 sales
From 2002 sales
From 2001 sales
Diamante Motors uses the installment method of accounting.
1. How much is the total realized gross profit for calendar year 2003?
The books of Super Sales , Inc. show the following balances on December 31, 2003:
Deferred gross profit (before adjustment)
Analysis of the accounts receivable reveal the following:
2002 installment accounts
2003 installment accounts
Sales on an installment basis in 2002 were made at 30% above cost, in 2003, at
above cost. Expenses paid relating to installment sales were P1,500.
2. How much is the net income on installment sales?
The following information pertain to installment sales of Uniwide
Down payment :
in Year 1, P785,000 in year 2, and P968,000 in
Markup on cost:
Collections after down payment: 40% during year of sale, 35% during the year
after sale, and 25% on the third year.