Prepare entries for both years

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The Very Poor Company is involved in making installment sales whose probability of collection is extremely low. Accordingly, it has elected to use the cost recovery method. Information regarding the years 19A and 19B is as follows:


19A

19B

Installment sales

$50,000

$80,000

Cost of goods sold

35,000

60,000

Gross profit

$15,000

$20,000

Collections on 19A sales

$25,000

$15,000

Collections on 19B sales

-

40,000

Prepare entries for both years.

 

Reference no: EM13505102

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