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Use the installment sales method of accounting

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Reference no: EM13504967

Charter Corporation, which began business in 2011, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2011 and 2012:

 

                                                                                                                        2011                   2012

 

 Installment sales                                                                                               $ 360,000            $ 350,000

Cost of installment sales                                                                                      234,000               245,000

 Cash collections on installment sales during:

                2011                                                                                                 150,000               100,000

                2012                                                                                                        _                  120,000

 

Required:

Prepare summary journal entries for 2011 and 2012 to account for the installment sales and cash collections. The company uses the perpetual inventory system.

 

Reference no: EM13504967

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