Reference no: EM132975289
Problem 1 - ABC Company sold Cellphones on instalment basis on July 1, 2018. The Unit cost to the company was P388,800, but the instalment selling price was set at P550,800. Terms of payment included the acceptance of used Cellphones with trade in allowance of P194,400. Cash of P32,400 was paid in addition to the traded in Cellphones with the balance to be paid in ten monthly instalments due at the end of each month commencing the month after the month of sale. It would require P8,100 to recondition the used Cellphones so that it could be resold for P162,000. A 15% gross profit was usual from the sale of used cellphones.
How much is the fair value traded in merchandise?
How much is the under/ (over) allowance in trade in?
What is the Gross Profit rate?
How much is the monthly payment?
How much is the total Realized Gross Profit in 2018?
Problem 2 - AAA Insurance Company issues one year, motor/vehicle insurance for a total premium of P15,000. If it was issued on January 1, 2019,
How much is the earned portion for the month ended January 31, 2019?
How much is the earned portion for the month ended December 31, 2019?
How much is the unearned portion for the month ended January 31, 2019?
How much is the unearned portion for the month ended December 31, 2019?
How much is the provision for unearned premium on December 31, 2019?
Problem 3 - On January 1, 2019, AAA insurance co. entered into reinsurance contract with CCC Co. for a premium of P2,000. Commission expense incurred on the reinsurance contract issued is 10%.
How much is the amount due from ceding company (book of reinsurer)?
How much is the amount of commission income recognized by cedant?
Problem 4 - The Japan Homes Corporation started operations on January 1, 2017 selling home appliance and furniture sets both for cash and on instalment basis. Data on the instalment sales operations of the company gathered for the years ending December 31, 2017 and 2018 were as follows:
2017 2018
Installment Sales
Cost of Installment Sales
Cash collected on instalment sales
2017 installment contracts
2018 installment sales
P1,200,000
P720,000
P630,000
P1,500,000
P1,050,000
P450,000
P900,000
On January 6, 2018 an instalment sale in 2017 was defaulted and the merchandise was repossessed. The fair market value of the merchandise after reconditioning costs amounted to P15,000. There is a 10% normal profit based on estimated resale value, the corporation incurred P3,000 disposal costs and P5,000 reconditioning cost. Related instalment receivable balance on January 6, 2018 was P17,000. The operating expenses incurred in 2017 and 2018 amounted to P50,000 and P100,000, respectively.
What is the gross profit rate 2017 and 2018, respectively?
What is the Deferred Gross Profit as of 2018 form 2017 sales?
How much is the amount of estimated resale value?
What is the amount to be debited as the value of Repossessed Merchandise at a time of repossession?
How much is the gain/(loss) on repossession?
How much is the RGP after gain or (loss) on repossession in December 31, 2017?
How much is the RGP after gain or (loss) on repossession in December 31, 2018?