Samuels Co. appropriately uses the installment-sales method of accounting. On December 31, 2016, the books show balances as follows. Installment Recei
Samuels Co. appropriately uses the installment-sales method of accounting. On December 31, 2016, the books show balances as follows. Installment Receivables Deferred Gross Profit Gross Profit on Sales
\r\n2014 $12,000 2014 $ 7,000 2014 35%
\r\n2015 40,000 2015 26,000 2015 33%
\r\n2016 80,000 2016 95,000 2016 32%
\r\nInstructions
\r\n(a) Prepare the adjusting entry or entries required on December 31, 2016 to recognize 2016 realized gross profit. (Installment receivables have already been credited for cash receipts during 2016.)
\r\n(b) Compute the amount of cash collected in 2016 on accounts receivable from each year.