Question: (Installment-Sales Method and Cost-Recovery Method) Swift Corp., a capital goods manufacturing business that started on January 4, 2014, and operates on a calendar-year basis, uses the installmentsales method of profit recognition in accounting for all its sales. The following data were taken from the 2014 and 2015 records.
The amounts given for cash collections exclude amounts collected for interest charges. Instructions
(a) Compute the amount of realized gross profit to be recognized on the 2015 income statement, prepared using the installment-sales method. (Round percentages to three decimal places.)
(b) State where the balance of Deferred Gross Profit would be reported on the financial statements for 2015.
(c) Compute the amount of realized gross profit to be recognized on the income statement, prepared.