Presented below is summarized information for Johnston Co., which sells merchandise on the installment basis. 2014 2015 2016 Sales (on installment pla
Presented below is summarized information for Johnston Co., which sells merchandise on the installment basis. 2014 2015 2016 Sales (on installment plan) $250,000 $260,000 $280,000
\r\nCost of sales 155,000 163,800 182,000
\r\nGross profi t $ 95,000 $ 96,200 $ 98,000
\r\nCollections from customers on:
\r\n2014 installment sales $ 75,000 $100,000 $ 50,000
\r\n2015 installment sales 100,000 120,000
\r\n2016 installment sales 100,000
\r\nInstructions
\r\n(a) Compute the realized gross profit for each of the years 2014, 2015, and 2016.
\r\n(b) Prepare all entries required in 2016, applying the installment-sales method of accounting. (Ignore interest charges.)