Chapter 18- IA3
Last Modified: 2012-12-03
P26. Dot Point, Inc. is a retailer of washers anddryers and offers a three-year service contract on each appliance sold.Although Dot Point sells the appliances on an installment basis, all servicecontracts are cash sales at the time of purchase by the buyer. Collectionsreceived for service contracts should be recorded as
a. provide nobasis for the repossessed asset thereby recognizing a loss.
For the years 2012 and 2013, Adler shouldrecognize gross profit of
Assume that Gomez uses thepercentage-of-completion method of accounting. The portion of the total grossprofit to be recognized as income in 2012 is
Costs incurred to date $5,400,000 $8,400,000
Estimated costs to complete 3,600,000 —
Billings to date 4,200,000 12,600,000
Collections to date 3,000,000 10,800,000
If Kiner uses the percentage-of-completion method,the gross profit to be recognized in 2012 is
What is the rate of gross profit on theinstallment sales made by Vaughn Corporation during 2012?
What is the rate of gross profit on theinstallment sales made by Martin Corporation during 2012?
BalanceSheet of Amount of Inventory
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