Progress Limited sells power generator sets on an instalment sales basis. The terms of payment are...

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Progress Limited sells power generator sets on an instalment sales basis. The terms of payment are as follows: R1 500 per set Cash price: Deposit: Interest: 20% of cash price per set 20% per annum Instalments: 35 monthly payments of R54 and a final payment of R30. The cost price per set amounted to R900, and 200 sets were sold during the year ended 30 June 2006. Instalments totalling R64 800 were received. Profit is regarded as realised in the year of sale, but finance charges are written off on the basis of the ratio of instalments received to total instalments. Required (a) Show the following accounts: instalment sales debtors; instalment sales trading account; and interest suspense account (b) Show how instalment sales debtors will be reflected in the balance sheet at 30 June 2006. Progress Limited sells power generator sets on an instalment sales basis. The terms of payment are as follows: R1 500 per set Cash price: Deposit: Interest: 20% of cash price per set 20% per annum Instalments: 35 monthly payments of R54 and a final payment of R30. The cost price per set amounted to R900, and 200 sets were sold during the year ended 30 June 2006. Instalments totalling R64 800 were received. Profit is regarded as realised in the year of sale, but finance charges are written off on the basis of the ratio of instalments received to total instalments. Required (a) Show the following accounts: instalment sales debtors; instalment sales trading account; and interest suspense account (b) Show how instalment sales debtors will be reflected in the balance sheet at 30 June 2006.

Answer rating: 100% (QA)

Step 1 Progress Limited sells power generator sets on an installment sales basis Cash price R1500 pe... View the full answer