Question
In: Accounting
X Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements....
X Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2020 and 2021.
|
2020 |
2021 |
|||
|
Installment sales |
$800,000 |
$1,000,000 |
||
|
Cost of installment sales |
480,000 |
650,000 |
||
|
Cash collections on sales of 2020 |
300,000 |
500,000 |
||
|
Cash collections on sales of 2021 |
-0- |
400,000 |
||
|
Compute the amount of realized gross profit recognized in each year. |
|
2020 |
2021 |
Solutions
Expert Solution
| Answer | ||
| CALCULATION OF THE GROSS PROFIT RECOGNIZED FOR 2020 and 2021 | ||
| Year 2020 | Year 2021 | |
| PARTICULARS | AMOUNT | AMOUNT |
| Installment Sales | $ 800,000 | $ 1,000,000 |
| Less: Cost of installment Sales | $ 480,000 | $ 650,000 |
| Gross Profit | $ 320,000 | $ 350,000 |
| Answer = Realized Gross profit recognize for the year 2020 = | $ 320,000 | |
| Answer = Realized Gross profit recognize for the year 2021 = | $ 350,000 | |
ekkarill92 answered 1 year agoRelated Solutions
The Bailey’s Corporation uses absorption costing for its external financial statements. Managers believe the Income Statements...
The Bailey’s Corporation uses absorption costing for its
external financial statements. Managers believe the Income
Statements are confusing, because they conflict with their
“instincts” about profitability. The controller suggests that the
organization use variable costing because it may give managers
better information, especially for decisions about operations. The
following information was pulled from last year’s publicly
available Income Statement as well as internal records.
Data alternative 2
Cost per unit: $40 DM, $30 DL, $10 Variable OH
Fixed OH: $150,000
Number...
When analyzing financial statements it is important to recognize that accounting distortions can arise. Accounting distortions...
When analyzing financial statements it is important to recognize
that accounting distortions can arise. Accounting distortions are
those things that cause deviations in accounting information from
the underlying economics. Which of the following statements is not
correct? Accounting distortions: can arise as management may
deliberately manipulate financial statements arise often through
application of (correct) accounting principles can affect the
quality of earnings arise because the stock market is not
efficient
How is the percent-of-sales method used in developing pro forma income statements for use in financial...
How is the percent-of-sales method used in developing pro forma
income statements for use in financial planning?
Green Corporation is required to change its method of accounting for federal income tax purposes. The...
Green Corporation is required to change its method of accounting
for federal income tax purposes. The change will require an
adjustment to income to be made over three tax periods. Joe, the
sole shareholder of Green, wants to better understand the
implications of this adjustment for E&P purposes. Joe gets
dividend distributions from Green every year. Explain to Joe the
impact of the adjustment on E&P.
Green Corporation is required to change its method of accounting for federal income tax purposes. The...
Green Corporation is required to change its method of accounting
for federal income tax purposes. The change will require an
adjustment to income to be made over three tax periods. Joe, the
sole shareholder of Green, wants to better understand the
implications of this adjustment for E&P purposes. Joe gets
dividend distributions from Green every year. Explain to Joe the
impact of the adjustment on E&P.
Help with clear explanation please!
Explain the current rate method and the temporal method for translating accounting financial statements.
Explain the current rate method and the temporal method for
translating accounting financial statements.
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...
Here are simplified financial statements for Watervan
Corporation:
INCOME
STATEMENT
(Figures in $
millions)
Net sales
$
895.00
Cost of goods sold
755.00
Depreciation
45.00
Earnings before interest and taxes (EBIT)
$
95.00
Interest expense
26.00
Income before tax
$
69.00
Taxes
14.49
Net income
$
54.51
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Current assets
$
383
$
340
Long-term assets
286
236
Total assets
$
669
$
576
Liabilities and shareholders’ equity...
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...
Here are simplified financial statements for Watervan
Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales
$
887.00
Cost of goods sold
747.00
Depreciation
37.00
Earnings before interest and taxes
(EBIT)
$
103.00
Interest expense
18.00
Income before tax
$
85.00
Taxes
29.75
Net income
$
55.25
BALANCE SHEET
(Figures in $
millions)
End of Year
Start of Year
Assets
Current assets
$
375
$
324
Long-term assets
270
228
Total assets
$
645
$
552
Liabilities and shareholders’ equity...
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...
Here are simplified financial statements for Watervan
Corporation: INCOME STATEMENT (Figures in $ millions) Net sales $
895.00 Cost of goods sold 755.00 Depreciation 45.00 Earnings before
interest and taxes (EBIT) $ 95.00 Interest expense 26.00 Income
before tax $ 69.00 Taxes 14.49 Net income $ 54.51 BALANCE SHEET
(Figures in $ millions) End of Year Start of Year Assets Current
assets $ 383 $ 340 Long-term assets 286 236 Total assets $ 669 $
576 Liabilities and shareholders’ equity...
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...
Here are simplified financial statements for Watervan
Corporation:
INCOME
STATEMENT
(Figures in $
millions)
Net sales
$
888.00
Cost of goods sold
748.00
Depreciation
38.00
Earnings before interest and taxes (EBIT)
$
102.00
Interest expense
19.00
Income before tax
$
83.00
Taxes
17.43
Net income
$
65.57
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Current assets
$
376
$
326
Long-term assets
272
229
Total assets
$
648
$
555
Liabilities and shareholders’ equity...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
- There are a large number of tasks involved in information technology and programming, and many of...
ADVERTISEMENT