TJ Company recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accounts are adjusted, the ledger shows the following: 

Installment receivable, 20x1 P675,000 

Installment receivable, 20x2 1,050,000 

Deferred gross profit, 20x1 P370,000 

Deferred gross profit, 20x2 545,000 

Regular sales 3,000,000 

Cost of regular sales 1,920,000 

Each year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross profit on installment sales was 4% higher than 20x1. 

REQUIRED: Compute for the following: 

1. Adjusted deferred gross profit balance (DGP) in 20x2

2. Total realized gross profit (RGP) in 20x2

Answer rating: 100% (QA)

To compute the adjusted deferred gross profit DGP balance and total realized gross profit RGP in 20x... View the full answer