Swift Corp., a capital goods manufacturing business that started on January 4, 2012, and operates on a calendar-year basis, uses the installment-sales method of profit recognition in accounting for all its sales. The following data were taken from the 2012 and 2013 records.
2012 2013
- Installment sales $561,000 $611,000
- Gross profit as a percent of costs 24% 29%
- Cash collections on sales of 2012 $139,000 $153,000
- Cash collections on sales of 2013 -0- $243,000
The amounts given for cash collections exclude amounts collected for interest charges.
(a) Compute the amount of realized gross profit to be recognized on the 2013 income statement, prepared using the installment-sales method. (Round gross profit percentage to 3 decimal places, e.g. 19.355%. Round answers to 0 decimal places, e.g. 5,275.)