Question

Ajax Company appropriately accounts for certain sales using the installment sales method. The perpetual inventory system is used. Information related to installment sales for 2011 and 2012 is as follows:

Required:
1. Calculate the amount of gross profit that would be recognized each year from installment sales.
2. Prepare all necessary journal entries for each year.
3. Repeat requirements 1 and 2 assuming that Ajax uses the cost recovery method to account for its installment sales.



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  • CreatedJune 24, 2013
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