Installment Sales Reviewer

INSTALLMENT SALES A. GROSS PROFIT RATES For Prior Year(s) Sales: DGP, Beginning IAR, Beginning For Current Year: __Gross Profit__ Instalment Sales B. INSTALLMENT SALES METHOD IAR, Beginning Multiply Less: IAR w/o, Defaulted by IAR, before Adjustment GP% Less: Collections______ Rate IAR, End

DGP, Beginning Less: DGP on IAR, w/o, Defaulted DGP, before Adjustment Less: RGP___________________ DGP, End

C. GAIN OR LOSS ON REPOSESSION FMV of Repossessed Merchandise <=> Formula for FMV: Resale Value Less: Reconditioning Cost Normal Profit (Based on Sales) Disposal Cost______________ FMV in Repossessed Mdse/True Worth/ True Value/ Appraised Value/ NRV/ Wholesale Value/ On a depreciated cost basis

Unrecovered Cost Formula for UC: IAR, Defaulted or Unpaid Balance x Cost Ratio_________________ Unrecovered Cost or… IAR, Defaulted or Unpaid Balance Less: DGP, on IAR Defaulted__ Unrecovered Cost

IF:

FMV < UC = Loss FMV > UC = Gain FMV = UC = ~_~

D. OVER OR UNDER ALLOWANCE OF TRADE-IN MERCHANDISE Trade in Allowance <=> Actual Value/FMV/True Worth  Always given in problems Formula: IF: T-in < AV = Under (+) Resale Value/Price T-in > AV = Over (-) Less: Reconditioning Cost T-in = AV = ~_~ Normal Profit Cost to sell/Disposal Cost Actual Value/FMV/TW / Etc. E. GAIN OR LOSS ON REPOSSESSION (POINT OF DELIVERY METHOD) FMV of Repossessed Mdse. <=> IAR, Defaulted  Just compare the two and get the gain or (loss).

ERIKA MAE A. RELLORES

*Unpaid Balance or Unrecovered Cost or Repossessed Account are all the same

F. GROSS PROFIT RECOGNIZED (POINT OF DELIVERY METHOD) Instalment Sales Less: Cost of Instalment Sales/Shipment on Instalment Sales Gross Profit on Instalment Sales G. COST RATIO 100% - GP Rate = Cost Ratio Or… Cost on Installment Sales (COIS) = Instalment Sales

Cost Ratio

H. COLLECTIONS Cash Collections Collections Actual Value/ FMV

Down Payment Instalment as to P

I.

INSTALLMENT Adjusted Sales (Over/Under Allowance) Less: Down Payment Actual Value of Merchandise Total Payments / No. of Instalment Payments______ Payment of each instalment x No. of Paid Instalment__________ Instalment

J.

COLLECTIONS AS TO PRINCIPAL AND INTEREST Date1 Collection2 Coll’n as to P3

   



2: DP 3: DP 5: Monthly IS 7: 5 - 6 Collection as to P - Add all values in column #3 Collection as to Interest - Add all values in column #4 Unpaid Balance - Last value in column #5 Interest Income Collections as to interest Add: (Unpaid Balance x Monthly IS Rate) Interest Income If periodic payment is not stated:

ERIKA MAE A. RELLORES

Coll’n as to I4

6: 4 x %

Unpaid Balance5 1: IS 4: 1 - 3 8: 4 - 7

Unpaid Balance = Periodic Payment PV of Annuity

K. REALIZED GROSS PROFIT RGP on Instalment Sales

Total RGP

GP on Cash Sales GP on Charge Sales

L. TRIAL BALANCE Silent on Trial Balance:  DGP = Assumption is Before Adjustment  IAR = Assumption is Ending Balance M. NET INCOME (LOSS) RGP (If interest income is included in collections, remove it) GP on Regular Sales Other income (Gain on Sale and Interest Income) Less: Operating Expense Finance Cost (Interest Expense) Loss on Sale Loss on Repossession________________________ Net Income (Loss) 

x x x x x x x

(x) NI/L

Note: Instalment Accounts written-off (w/o) is not deducted. Do not touch!

N. MARK-UP  Mark-up on IS, 130% of cost (Cost = 100%) Example: Sales 230% GP% = 130%/230% Cost 100% = 56.52% GP 130%  Mark-up on RS, 20% on Sales (Sales = 100%) Example: Sales 100% Cost 80% GP 20%

ERIKA MAE A. RELLORES