Charter corporation which began business in 2013, Ask an Expert

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Charter Corporation, which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2013 and 2014:

Installment sales$450,000 $440,000 Cost of installment sales 360,000 396,000 Cash collections on installment sales during: 2013 150,000 135,000 2014 - 125,000

Required:

1.How much gross profit should Charter recognize in 2013 and 2014 from installment sales?

2.What should be the balance in the deferred gross profit account at the end of 2013 and 2014?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966001

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