Question

company sells automobiles on installment. Information presented below relates to tabor’s operations for the last three...

company sells automobiles on installment. Information presented below relates to tabor’s operations for the last three years:

2017 2016 2015
Installment sales 1,075,000

Gross margin on cost 66 2/3% 33 1/3% 25%

Outstanding Installment Receivable

December 31
From 2017 sales 698,750
From 2016 sale 234,000 585,000
From 2015sales 330,400 865,400

During 2017, Chan repossessed an automobile that it has sold for P160,000 on installment basis in 2015. The installment receivable balance related to this repossessed merchandise is P64,000. The company expects to resell the repossessed item for P56,000 before any reconditioning cost. Reconditioning cost amount to P7,500. The company’s normal profit margin on sale of used automobile is 15%.

questions:
1. Compute for realized gross profit in 2017

2. Compute for the gain/loss on repossession in 2017

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