Houser Appliances accounts for all sales of its merchandise on the installment b

Question

Houser Appliances accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/16. What is the gross profit rate for 2015? (Round answer to 0 decimal places, eg. 12%,) Gross profit rate % What is the gross profit rate for 2016? (Round answer to 0 decimal places, eg 25%) Gross profit rate Of the total cash receipts in 2016, how much represents collections from installment sales of: (Round answers to O decimal places, e.g. 1,225.) (1)2014 $ (2) 2015 $

Explanation / Answer

did not have enough information regarding 2014 or 2015 collection.

Installment Receivable 2015 50400 Deffered Gross Profit 2015 $   27,000.00 Gross profit % 53.57% Answer: gross profit rate in 2015 = 53.57% Gross profit rate for 2016: Installment sales in 2016 $ 126,000.00 Less:Cost of sales 2016 $   85,680.00 Gross profit for 2016 $   40,320.00 Gross Profit Rate(40320/126000) 32.00% Answer: Grossprofit rate for 2016= 32% Total Collection 118323 Less: Cash collection for 2016 (Sales less: Accounts receivable 2016) 35600 Cash collected for 2014 and 2015 82723

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