Gross Profit Calculations and Repossessed Merchandise Basler Corporation, which began business on January 1, 2010, appropriately uses the installment-sales method of accounting. The following data were obtained for the years 2010 and 2011.
![](https://www.solutioninn.com/images2/11-B-A-R-R%20(67).PNG)
(a) Compute the balance in the deferred gross profit accounts on December 31, 2010, and on December 31, 2011.
(b) A 2010 sale resulted in default in 2012. At the date of default, the balance on the installment receivable was $12,000, and the repossessed merchandise had a fair value of $8,000. Prepare the entry to record the repossession.
(AICPA adapted)