Question - Adam's Adorable Creations Company provided the following financial information for its installment-sales for the current year.
Financial Data:
Installment sales for current year $2,500,000
Cost of goods sold on installment basis $2,000,000
Repossessed merchandise: Estimated value $32,000
Repossessed merchandise: Unpaid balances $45,000
Payments by customers $1,600,000
Required:
(a) Prepare journal entries for the end of the year based on the information above.
(b) Prepare the entry to record the gross profit realized in the current year.