Swift corp a capital goods manufacturing business that

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Swift Corp, a capital goods manufacturing business that started on Jan 4, 2012 and operates on a calendar year basis, uses the installment method of profit recognition in accounting for all its sales. The following data were taken from the 2012 and 2013 records. 2012 2013 Installment Sales 480,000 620,000 Gross Profit as a % of costs 25% 28% Cash Collections on Sales of 2012 130,000 240,000 Cash Collections on Sales of 2013 - 160,000 The amounts given for cash collections exclude amounts collected for interest charges.

a) Compute the amount of unrealized gross profit to be recognized on the 2013 I/S, prepared using the installment-sales method. Round %'s to three decimal places

b) State Where the balance of deferred gross profit would be reported on the financial statements for 2013.

c) Compute the amount of realized-gross profit to be recognized on the income statement, prepared using the cost-recovery method.

Reference no: EM13599816

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