Jennifer Furnishings frequently has sales involving "no down payment and no payments for three months." Three months after the purchase date, customers make four equal monthly payments (i.e., they make equal payments 3, 4, 5, and 6 months after purchase). Each payment is one-quarter of the purchase price. The company has a December 31 year-end. During 2012, the company made the following sales on installment plans. Jennifer makes 15% gross profit on these sales.
Required: Using the installment sales method
a)Determine the balance of installment accounts receivable at December 31, 2012.
b)Determine the amount of deferred gross profit as at December 31, 2012. (Round to the nearest whole dollar.)
c)Determine the sales revenue to recognize in 2012 for installment sales made in the year.

Question

Jennifer Furnishings frequently has sales involving "no down payment and no payments for three months." Three months after the purchase date, customers make four equal monthly payments (i.e., they make equal payments 3, 4, 5, and 6 months after purchase). Each payment is one-quarter of the purchase price. The company has a December 31 year-end. During 2012, the company made the following sales on installment plans. Jennifer makes 15% gross profit on these sales.
  Required: Using the installment sales method
a)Determine the balance of installment accounts receivable at December 31, 2012.
b)Determine the amount of deferred gross profit as at December 31, 2012. (Round to the nearest whole dollar.)
c)Determine the sales revenue to recognize in 2012 for installment sales made in the year.

Quizplus · Accepted Answer

The Answer of Jennifer Furnishings frequently has sales involving "no down payment and no payments for three months." Three months after the purchase date, customers make four equal monthly payments (i.e., they make equal payments 3, 4, 5, and 6 months after purchase). Each payment is one-quarter of the purchase price. The company has a December 31 year-end. During 2012, the company made the following sales on installment plans. Jennifer makes 15% gross profit on these sales.
  Required: Using the installment sales method
a)Determine the balance of installment accounts receivable at December 31, 2012.
b)Determine the amount of deferred gross profit as at December 31, 2012. (Round to the nearest whole dollar.)
c)Determine the sales revenue to recognize in 2012 for installment sales made in the year.

Jennifer Furnishings Frequently Has Sales Involving "No Down Payment and No