Ruxton, Inc. accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial
balance at 12/31/09: Cash $ 90,200 Installment Accounts Receivable—2007 170,000 Installment Accounts Receivable—2008 400,000 Installment Accounts Receivable—2009 750,000 Inventory, 1/1/05 78,000 Repossessed Merchandise 22,000 Accounts Payable $ 136,000 Deferred Gross Profit—2003 84,000 Deferred Gross Profit—2004 195,000 Capital Stock 600,000 Retained Earnings 406,200 Installment Sales 1,000,000 Purchases 758,000 Loss on Repossession 3,000 Operating Expenses 150,000 $2,421,000 $2,421,000 Additional Data: 2007 Gross Profit Rate = 30%; Inventory 12/31/09 = $158,000; Repossessed merchandise 12/31/09 = $15,000; Merchandise sold in 2008 was repossessed in 2009 and the following entry was prepared (assume correctly): Deferred Gross Profit—2008 15,000 Repossessed Merchandise 22,000 Loss on Repossession 3,000 Installment Accounts Receivable—2008 40,000 Instructions (a) Determine collections during 2009 on Installment A/R for each of the years 2007, 2008, and 2009. (b) Without prejudice to your answer in Part (a), assume that total collections on Installment Accounts Receivable during 2009 were $1,060,000; $220,000 from 2007, $300,000 from 2008, and $540,000 from 2009. Prepare all necessary adjusting and closing entries at 12/31/09.
Recently Asked Questions
- Sociopolitical Factors, Psychological Effect, and Diverse Populations
- The Powerball lottery is decided every Wednesday and Saturday night by drawing five white balls out of a drum with 69 balls and one red ball out of a drum with
- Please describe how being a part of a diverse population influences your personal psychology. How might your personal psychology influence your professional