Samuels Co. appropriately uses the installment-sales method of accounting. On December 31, 2016, the books show balances as follows.

(a) Prepare the adjusting entry or entries required on December 31, 2016 to recognize 2016 realized gross profit.

(b) Compute the amount of cash collected in 2016 on accounts receivable from each year.

Transcribed Image Text:

Installment Receivables Deferred Gross Profit Gross Profit on Sales $ 7,000 26,000 2014 $12,000 40,000 2014 2014 35% 2015 2016 2015 2015 33% 2016 80,000 95,000 2016 32% Installment Receivables Deferred Gross Profit Gross Profit on Sales $ 7,000 26,000 2014 $12,000 40,000 2014 2014 35% 2015 2016 2015 2015 33% 2016 80,000 95,000 2016 32%

Answer rating: 100% (QA)

Solution Adjustment for deferred gross profit2014 Balance in deferred gross profit acc... View the full answer