Gross Profit

[Sparkle101]

Hilton Co. begun operation on Jan 1, 2007 and appropriately uses the installment method of accounting:
.........................................2007...............2008
Installment Sales...................1,200,000.........1,500,000
Collection from:
2007 Sales............................400,000...........500,000
2008 Sales............................______............600,000
Gross Profit Sales....................30%..................40%
The realizes gross profit for 2008?
Please help me and show calculation.

 

[Denis]

Please start using Google...

http://www.answers.com/topic/installment-sales-method

We're here to check YOUR work, not to teach.

 

[Sparkle101]

Thank you but what do i do with the collection sales: 30% x 500,000 =150,000 and 40% x 500,000 = 200,000 what do i do next. I really don't know what to do.

 

[Denis]

Thank you but what do i do with the collection sales: 30% x 500,000 =150,000 and 40% x 500,000 = 200,000 what do i do next. I really don't know what to do.

Where do you get the term "collection sales"? There's no such animal!
What is "collected" during a year is considered the gross profit for that year, period: don't complicate it.

In 2008, 500,000 + 600,000 = 1,100,000 was "collected": that the gross profit.

That's the way I understand it...

 

[Sparkle101]

: 1,100,000 * .4 = 440,000 is this it. i made a mistake sorry the next post:

 

[Sparkle101]

2007 - 500,000 x 30% = 150,000 and 2008 - 600,000 x 40% = 240,000 and add the results, am i correct: