Swift corp a capital goods manufacturing business that, Ask an Expert

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Swift Corp., a capital goods manufacturing business that started on January 4, 2012, and operates on a calendar-year basis, uses the installment-sales method of profit recognition in accounting for all its sales. The following data were taken from the 2012 and 2013 records.
2012 2013

Installment sales $561,000 $611,000
Gross profit as a percent of costs 24% 29%
Cash collections on sales of 2012 $139,000 $153,000
Cash collections on sales of 2013 -0- $243,000

The amounts given for cash collections exclude amounts collected for interest charges.

(a) Compute the amount of realized gross profit to be recognized on the 2013 income statement, prepared using the installment-sales method. (Round gross profit percentage to 3 decimal places, e.g. 19.355%. Round answers to 0 decimal places, e.g. 5,275.)

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9978808

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