Other sales include those of second-hand items acquired as repossessions and trade-ins of P1, 500 and P4, 000 respectively. The merchandise inventory (new) as of December 31, 2021 was P18, 000. The bookkeeper failed to record a trade-in of P2, 000 and the item was still unsold as of the end of the year. The gross profit rate on installment sales is 40%. How did we get that percentage?
You are given the following figures as of December 31, 2021:
Installment contracts receivable - 2021: 285, 000
Purchases 284, 000
Shipments on installment basis 240, 000
Trade-ins 13, 000
Repossession 7, 000
Installment sales 398, 000
Other sales 50, 000
Loss on default 3, 000
Operating expense 35, 000
Other sales include those of second-hand items acquired as repossessions and trade-ins of P1, 500 and P4, 000 respectively. The merchandise inventory (new) as of December 31, 2021 was P18, 000. The bookkeeper failed to record a trade-in of P2, 000 and the item was still unsold as of the end of the year. The gross profit rate on installment sales is 40%. How did we get that percentage?
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