The following selected accounts were taken from the trial balance of Romen Company as December 31, 2020: Accounts receivable 750,000 I nstallment receivable – 2018 150,000 Installment receivable - 2019 450,000 Installment receivable – 2020 2,700,000 Beginning inventory 525,000 Purchases 3,900,000 Freight-in 30,000 Repossessed merchandise @ NRV 150,000 Repossession loss 240,000 Cash sales 900,000 Credit sales 1,800,000 Installment sales 4,460,000 Deferred gross profit – 2018 222,000 Deferred gross profit – 2019 393,600 Operating expenses 150,000 Cost of installment sales 2,787,500 Additional information: Gross profit rate for 2018 and 2019 installment sales were 30% and 32%, respectively. The entry for repossessed goods was: Repossessed Merchandise 150,000 Repossession loss 240,000 Installment Receivable – 2018 180,000 Installment Received - 2019 210,000 Merchandise on hand at the end of 2020 (new and repossessed) was 282,000. Required: Compute for the following : Total realized gross profit in 2020. Net income in 2020.
The following selected accounts were taken from the trial balance of Romen Company as December 31, 2020: Accounts receivable 750,000 I nstallment receivable – 2018 150,000 Installment receivable - 2019 450,000 Installment receivable – 2020 2,700,000 Beginning inventory 525,000 Purchases 3,900,000 Freight-in 30,000 Repossessed merchandise @ NRV 150,000 Repossession loss 240,000 Cash sales 900,000 Credit sales 1,800,000 Installment sales 4,460,000 Deferred gross profit – 2018 222,000 Deferred gross profit – 2019 393,600 Operating expenses 150,000 Cost of installment sales 2,787,500 Additional information: Gross profit rate for 2018 and 2019 installment sales were 30% and 32%, respectively. The entry for repossessed goods was: Repossessed Merchandise 150,000 Repossession loss 240,000 Installment Receivable – 2018 180,000 Installment Received - 2019 210,000 Merchandise on hand at the end of 2020 (new and repossessed) was 282,000. Required: Compute for the following : Total realized gross profit in 2020. Net income in 2020.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 9E: Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton...
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Question
The following selected accounts were taken from the
Accounts receivable 750,000 I
nstallment receivable – 2018 150,000
Installment receivable - 2019 450,000
Installment receivable – 2020 2,700,000
Beginning inventory 525,000
Purchases 3,900,000
Freight-in 30,000
Repossessed merchandise @ NRV 150,000
Repossession loss 240,000
Cash sales 900,000
Credit sales 1,800,000
Installment sales 4,460,000
Deferred gross profit – 2018 222,000
Deferred gross profit – 2019 393,600
Operating expenses 150,000
Cost of installment sales 2,787,500
Additional information:
- Gross profit rate for 2018 and 2019 installment sales were 30% and 32%, respectively.
- The entry for repossessed goods was:
Repossessed Merchandise 150,000 Repossession loss 240,000
Installment Receivable – 2018 180,000
Installment Received - 2019 210,000
- Merchandise on hand at the end of 2020 (new and repossessed) was 282,000.
Required: Compute for the following :
- Total realized gross profit in 2020.
- Net income in 2020.
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