Collections on 2019 Sales 10,000

Less: Cost of sales 2019 8,000 2,000

Collections on 2020 Sales 12,000
Less: Cost of sales 2020 9,000 3,000
Total Gross Profit 5,000

Installment Sales (560,000/40%) 1,400,000

Less: Installment Accounts Receivable 12/31/19 800,000
Cash collections in 2019 600,000
Multiply by gross profit rate on sales 40%
Realized gross Profit, 2019 240000

2018 2019
Installment Sales 375,000 100% 360,000 100%
Cost of Sales 285,000 76% 252,000 70%
Gross Profit 90,000 24% 108,000 30%

Installment Receivable from 2018 sales (9,000/24%) 37,500

Installment Receivable from 2019 sales (72,000/30%) 240,000
Total installment receivable 12/31/19 277,500

Installment accounts receivable 1/1/19 755,000

Add: Installment Sales 950,000
Total 1,705,000
Less: Installment Accounts Receivable 12/31/19 840,000
Collection 865,000
Multiply by gross profit ratio on sale
(339750/755000) 45%
Realized gross profit in 2019 389250

Unrealized gross profit 192,000

Divide by gross profit rate on sales 40%
(66 2/3%/166 2/3%)
Uncollected portion of installment sales 480000
Add collections including down payment 360,000
Total amount of installment sales 840,000