Creations Company provided the following financial information for its installment sales for the current year.
Financial Data:
Installment sales for current year $2,400,000
Cost of goods sold on installment basis $1,800,000
Repossessed merchandise: Estimated value $56,000
Repossessed merchandise: Unpaid balances $90,000
Payments by customers $1,750,000
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.