Prepare journal entries

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Question - The Abbott Corporation sells merchandise on the installment basis, and the uncertainties of cash collection make the use of the installment sales method of accounting acceptable. The following data relate to two years of operations.

2011 2010

Installment Sales $480,000 $560,000

Cost of Installment Sales 300,000 364,000

Gross Profit 180,000 196,000

Gross Profit Percentage 37.5% 35%

Cash Collections:

2011 Sales $190,000 210,000

2012 Sales -- 235,000

Prepare Journal Entries for 12/31/2011 and 12/31/2012.

Reference no: EM131754836

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