On July 1, 2020, Ibiza Automobiles sold a new car to Mr. Xi for P850,000. The car costs Ibiza Automobiles P650,625. Mr. Xi paid 25% cash down payment and traded his old car. Ibiza Automobiles granted an allowance of P80,000 on the old car traded, the balance payable in equal monthly installments. The monthly installment amounts to P30,000 inclusive of 12% interest on the unpaid balance of the principal amount of obligation. The old car traded in has a selling price of P120,000 after expending reconditioning costs of P22,500. After paying three installments, Mr. Xi suffered major financial setback incapacitating him to continue paying. The car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P300,000. 

What is the gain (loss) on repossession? 

(A) P(62,617.50) 

(B) P62,617.50 

(C) P(62,716.50) 

(D) P62,716.50 

Under the installment method, how much is the realized gross profit to be recognized at the end of the year? 

(A) P96,003 

(B) P75,625 

(C) P100,000 

(D) P90,073

Answer rating: 100% (QA)

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