INSTALLMENT SALES A.

GROSS PROFIT RATES For Prior Year(s) Sales: DGP, Beginning IAR, Beginning For Current Year: __Gross Profit__ Instalment Sales B. INSTALLMENT SALES METHOD IAR, Beginning Multiply Less: IAR w/o, Defaulted by IAR, before Adjustment GP% Less: Collections______ Rate IAR, End C. GAIN OR LOSS ON REPOSESSION FMV of Repossessed Merchandise <=> Formula for FMV: Resale Value Less: Reconditioning Cost Normal Profit (Based on Sales) Disposal Cost______________ FMV in Repossessed Mdse/True Worth/ True Value/ Appraised Value/ NRV/ Wholesale Value/ On a depreciated cost basis IF: FMV < UC = Loss FMV > UC = Gain FMV = UC = ~_~

DGP, Beginning Less: DGP on IAR, w/o, Defaulted DGP, before Adjustment Less: RGP___________________ DGP, End

Unrecovered Cost Formula for UC: IAR, Defaulted or Unpaid Balance x Cost Ratio_________________ Unrecovered Cost or IAR, Defaulted or Unpaid Balance Less: DGP, on IAR Defaulted__ Unrecovered Cost

*Unpaid Balance or Unrecovered Cost or Repossessed Account are all the same

D. OVER OR UNDER ALLOWANCE OF TRADE-IN MERCHANDISE Trade in Allowance <=> Actual Value/FMV/True Worth Always given in problems Formula: IF: T-in < AV = Under (+) Resale Value/Price T-in > AV = Over (-) Less: Reconditioning Cost T-in = AV = ~_~ Normal Profit Cost to sell/Disposal Cost Actual Value/FMV/TW / Etc. E. GAIN OR LOSS ON REPOSSESSION (POINT OF DELIVERY METHOD) FMV of Repossessed Mdse. <=> IAR, Defaulted Just compare the two and get the gain or (loss).

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F. GROSS PROFIT RECOGNIZED (POINT OF DELIVERY METHOD) Instalment Sales Less: Cost of Instalment Sales/Shipment on Instalment Sales Gross Profit on Instalment Sales G. COST RATIO 100% - GP Rate = Cost Ratio Or Cost on Installment Sales (COIS) = Instalment Sales H. COLLECTIONS
Cash Collections Collections
Actual Value/ FMV Down Payment Instalment as to P

Cost Ratio

I.

INSTALLMENT Adjusted Sales (Over/Under Allowance) Less: Down Payment Actual Value of Merchandise Total Payments / No. of Instalment Payments______ Payment of each instalment x No. of Paid Instalment__________ Instalment COLLECTIONS AS TO PRINCIPAL AND INTEREST Date1 Collection2 Colln as to P3 2: DP 3: DP 5: Monthly IS 7: 5 - 6 Collection as to P - Add all values in column #3 Collection as to Interest - Add all values in column #4 Unpaid Balance - Last value in column #5 Interest Income Collections as to interest Add: (Unpaid Balance x Monthly IS Rate) Interest Income If periodic payment is not stated:

J.

Colln as to I4

6: 4 x %

Unpaid Balance5 1: IS 4: 1 - 3 8: 4 - 7

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Unpaid Balance = Periodic Payment PV of Annuity

K. REALIZED GROSS PROFIT

RGP on Instalment Sales GP on Cash Sales GP on Charge Sales

Total RGP

L. TRIAL BALANCE Silent on Trial Balance: DGP = Assumption is Before Adjustment IAR = Assumption is Ending Balance M. NET INCOME (LOSS) RGP (If interest income is included in collections, remove it) GP on Regular Sales Other income (Gain on Sale and Interest Income) Less: Operating Expense Finance Cost (Interest Expense) Loss on Sale Loss on Repossession________________________ Net Income (Loss)

x x x x x x x

(x) NI/L

Note: Instalment Accounts written-off (w/o) is not deducted. Do not touch!

N. MARK-UP Mark-up on IS, 130% of cost (Cost = 100%) Example: Sales 230% GP% = 130%/230% Cost 100% = 56.52% GP 130% Mark-up on RS, 20% on Sales (Sales = 100%) Example: Sales 100% Cost 80% GP 20%

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