Sawyer Furniture Company made $920,000 in installment sales in its first year of operations. It collected $302,000 in down payments and installments. Total purchases for the year were $735,200 and merchandise on hand at year-end was $82,000. The document provides entries to record installment sales, cash collections, cost of sales, unrealized gross profit, and realized gross profit using the installment sales method.

1. Sawyer Furniture Company concluded its first year of operations in which it made sales of
$920,000, all on installment. Collections during the year from down payments and installments
totaled $302,000. Purchases for the year totaled $735,200; the cost of merchandise on hand at the
end of the year was $82,000.
Using the installment-sales method, make summary entries to record the installment sales and
cash collections.
1. Using the installment-sales method, make summary entry to record the cost of installment
sales.
2. Using the installment-sales method, make summary entry to record unrealized gross profit.
3. Using the installment-sales method, make summary entry to record the realized gross profit.
This is not a multiple choice question. It is asking for entries for all 3!!!!
Solution
(a)Â Â Â Installment Accounts Receivable................................................... Â Â Â Â 920,000
Installment Sales.................................................................
                         920,000
Cash................................................................................................ Â Â Â Â 302,000
Installment Accounts Receivable.......................................
                         302,000
(b)Â Â Â Â Cost of Installment Sales ($735,200