Question: Installment-Sales Computations and Entries Presented below is summarized information for Johnston Co., which sells merchandise on the installment basis. (a) Compute the realized gross profit

Installment-Sales Computations and Entries Presented below is summarized information for Johnston Co., which sells merchandise on the installment basis.

2010 2011 2012 Sales (on installment plan) Cost of sales Gross profit

(a) Compute the realized gross profit for each of the years 2010, 2011, and 2012.

(b) Prepare in journal form all entries required in 2012, applying the installment-sales method of accounting. (Ignore interestcharges.)

2010 2011 2012 Sales (on installment plan) Cost of sales Gross profit Collections from customers on: 2010 installment sales 2011 installment sales 2012 installment sales $260,000 $250,000 $280,000 $ 96,200 $ 98,000 $ 95,000 $100,000 100,000 $ 75,000 $ 50,000 120,000 1

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