Yo Electronics makes all of its sales on credit and accounts for them using the installment sales

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Yo Electronics makes all of its sales on credit and accounts for them using the installment sales method. For simplicity, assume that all sales occur on the first day of the year and that all cash collections are made on the last day of the year. Yo Electronics charges 18% interest on the unpaid installment balances. Data for Year 1 and Year 2 are below:

Prepare all necessary journal entries for
(1) Year 1 and
(2) Year2.

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1 Installments Receivable 100000 Installment Sales 100000 Cost of Goods Sold 60000 Inventory 60000 C...View the full answer

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Related Book For book-img-for-question

Intermediate Accounting

ISBN: 978-0324312140

16th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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Question Posted: Apr 07, 2012 06:53 AM

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Yo Electronics makes all of its sales on credit and accounts for them using the installment sales

Question:

Year 1 Year 2 Sales Cost of goods sold. Cash collections (principal and interest): .$100,000 $120,000 80,000 60,000 From Year 1 sales 2 sales 40,000 50,000 90,000

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1 Installments Receivable 100000 Installment Sales 100000 Cost of Goods Sold 60000 Inventory 60000 C...View the full answer

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