Friday 4 January 2013

Charter Corporation, which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2013 and 2014: 2013 2014 Installment sales $360,000 $350,000 Cost of installment sales 234,000 245,000 Cash collections on installment sales during: 2013 150,000 100,000 2014 120,000 Required: Prepare summary journal entries for 2013 and 2014 to account for the installment sales and cash collections. The company uses the perpetual inventory system.

Charter Corporation, which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2013 and 2014:

 

2013

2014

Installment sales

$360,000

$350,000

Cost of installment sales

234,000

245,000

Cash collections on installment sales during:

 

 

      2013

150,000

100,000

      2014


120,000

 

Required:

Prepare summary journal entries for 2013 and 2014 to account for the installment sales and cash collections. The company uses the perpetual inventory system.



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