Journal Entries for Installment Sales and Cash Collections for Charter Corporation (2011-2012)
This paper focuses on journal entries related to installment sales and cash collections for Charter Corporation over a two-year period.
Charlotte Young
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Journal Entries for Installment Sales and Cash Collections for Charter Corporation (2011-2012)E5-3 on page 275-Charter CorporationPrepare summary journal entries for 2011 and 2012 to account for the installment sales and cashcollections. The company uses the perpetual inventory system.Exercise 5-32011To record installment salesInstallment receivables...................................................360,000Inventory.....................................................................234,000Deferred gross profit...................................................126,0002011To record cash collections from installment salesCash................................................................................150,000Installment receivables...............................................150,0002011To recognize gross profit from installment salesDeferred gross profit.......................................................52,500Realized gross profit...................................................52,5002012To record installment salesInstallment receivables...................................................350,000Inventory.....................................................................245,000Deferred gross profit...................................................105,0002012To record cash collections from installment salesCash................................................................................220,000Installment receivables...............................................220,0002012To recognize gross profit from installment salesDeferred gross profit.......................................................71,000Realized gross profit...................................................71,000