Ajax Company appropriately accounts for certain sales using the installment sales method. The perpetual inventory system is

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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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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Question Posted: Jun 24, 2013 07:26 AM

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Ajax Company appropriately accounts for certain sales using the installment sales method. The perpetual inventory system is

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AJAX COMPANY Installment Sales 2011 2012 Sales 300000 ...View the full answer

Intermediate Accounting

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