Houser Appliances accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/16. Additional information:2014 gross profit rate: 30%Total cash receipts during 2016: $110,000Merchandise sold in 2015 was repossessed in 2016 and the following entry was prepared:
Instructions
(a) What is the gross profit rate for 2015? Show supporting computations.
(b) What is the gross profit rate for 2016? Show supporting computations.
(c) Of the total cash receipts in 2016, how much represents collections from installment sales of: (Show supporting computations.)(1) 2014?(2) 2015?(3) 2016?(d) What is the total realized gross profit in 2016? Show supporting computations.

Question

Houser Appliances accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/16.  Additional information:2014 gross profit rate: 30%Total cash receipts during 2016: $110,000Merchandise sold in 2015 was repossessed in 2016 and the following entry was prepared:  
Instructions
(a) What is the gross profit rate for 2015? Show supporting computations.
(b) What is the gross profit rate for 2016? Show supporting computations.
(c) Of the total cash receipts in 2016, how much represents collections from installment sales of: (Show supporting computations.)(1) 2014?(2) 2015?(3) 2016?(d) What is the total realized gross profit in 2016? Show supporting computations.

Quizplus · Accepted Answer

The Answer of Houser Appliances accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/16.  Additional information:2014 gross profit rate: 30%Total cash receipts during 2016: $110,000Merchandise sold in 2015 was repossessed in 2016 and the following entry was prepared:  
Instructions
(a) What is the gross profit rate for 2015? Show supporting computations.
(b) What is the gross profit rate for 2016? Show supporting computations.
(c) Of the total cash receipts in 2016, how much represents collections from installment sales of: (Show supporting computations.)(1) 2014?(2) 2015?(3) 2016?(d) What is the total realized gross profit in 2016? Show supporting computations.

Houser Appliances Accounts for All Sales of Its Merchandise on the Installment