Scribd Logo
Upload

Welcome to Scribd!

  • Engage - Kaya Mo!

    Uploaded by

    Classicchic xx
    4 views2 pages
    1) The publisher recognized a profit of $20,300 after selling 700 books. The bookstore recognized commission income of $110,250 based on a 20% commission rate and 15% markup on retail sales of $315,000. The cost of 300 unsold books was $96,600 including freight. 2) Lunch Co's unadjusted deferred gross profit was $200,000 on sales of $1,000,000 with a cost of sales of $800,000. It collected $600,000 in 2021 with a 20% gross profit rate, realizing $120,000 in gross profit. The adjusted deferred gross profit was $80,000. 3) Dinner Co's installment sales

    Original Description:

    Original Title

    Engage_ Kaya mo!

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    1) The publisher recognized a profit of $20,300 after selling 700 books. The bookstore recognized commission income of $110,250 based on a 20% commission rate and 15% markup on retail sales of $315,000. The cost of 300 unsold books was $96,600 including freight. 2) Lunch Co's unadjusted deferred gross profit was $200,000 on sales of $1,000,000 with a cost of sales of $800,000. It collected $600,000 in 2021 with a 20% gross profit rate, realizing $120,000 in gross profit. The adjusted deferred gross profit was $80,000. 3) Dinner Co's installment sales

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    4 views2 pages

    Engage - Kaya Mo!

    Uploaded by

    Classicchic xx
    1) The publisher recognized a profit of $20,300 after selling 700 books. The bookstore recognized commission income of $110,250 based on a 20% commission rate and 15% markup on retail sales of $315,000. The cost of 300 unsold books was $96,600 including freight. 2) Lunch Co's unadjusted deferred gross profit was $200,000 on sales of $1,000,000 with a cost of sales of $800,000. It collected $600,000 in 2021 with a 20% gross profit rate, realizing $120,000 in gross profit. The adjusted deferred gross profit was $80,000. 3) Dinner Co's installment sales

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    1) Publisher Co.

    A. How much profit is recognized by the publisher?


    20%+2%=22%
    X=69,300/22%
    X=315,000/700 (sale of books)
    X=450

    Sale of books 700

    X unit cost 300

    total 210,000

    Add: Freight (22x70,000) 15,400

    Cost of Goods Sold 225,400

    Revenue (450x700) 315,000

    Less: cost of goods sold (225,400)

    Gross profit 86,600

    Less: tax expense (2%x315,000) (6,300)

    Commission expense(20%x315,000) (63,000)

    Profit P20,300

    B.How much income is recognized by the bookstore?


    Based on retail price:
    Commission(315,000x20%) 63,000
    Add: Mark up (315,000x15%) 47,250
    Commission income P110,250

    C. How much is the cost of the unsold books?

    Unsold books 300

    X unit cost before freight 300

    total 90,000

    Add: freight 6,600

    Inventory, end. P96,600


    2. Lunch Co.
    A. unadjusted balance of “deferred gross profit” on Dec.31, 2021
    Sales 1,000,000
    Less: cost of sales (800,000)
    Unadjusted Deferred gross profit P200,000

    B. amount of collection in 2021


    Installment accounts receivable – Dec. 31, 2021 P600,000

    C. gross profit rate based on sales in 2021


    Unadjusted Deferred Gross Profit 200,000/1,000,000 = 20% gross profit rate

    D. realized gross profit 2021


    Installment AR – Dec. 31, 2021 600,000
    x Gross Profit Rate 20%
    Realized Gross Profit P120,000

    E. adjusted balance of “deferred gross profit” on Dec.31, 2021


    Unadjusted Deferred Gross Profit 200,000
    Less: Realized Gross Profit (120,000)
    Adjusted Deferred Gross Profit P80,000

    3) Dinner Co.
    A.amount of installment sales in 2021
    Deferred gross profit (before year-end adjustment) 200,000 / 20% = P1,000,000

    B. balance on installment AR on Dec, 31, 2021


    Deferred gross profit (before year-end adjustment) 200,000
    Add: Collections during the year 400,000
    Installment AR on Dec, 31, 2021 P600,000

    C. realized gross profit 2021


    Installment AR – Dec. 31, 2021 600,000
    x Gross Profit Rate 20%
    Realized Gross Profit P120,000

    D.adjusted balance of “deferred gross profit” on Dec.31, 2021


    Unadjusted Deferred Gross Profit 200,000
    Less: Realized Gross Profit (120,000)
    Adjusted Deferred Gross Profit P80,000

    You might also like