/

nument
Sales
det

To
a
can see

Repossesion
o
Nate sesion de resale
JE : POV of seller
- value

e recondition
to

L
Issue :
COGS @ FMU/NRV

BB2010000
> at date

pepo
-
xx of repossesion
Intax
XX

collectin
XX
Date of collection 150000

Cash& 123, 000 D

actual collectinon X = 410k x30% =

imp
work back:

3-I
Resale Value
-
re condition cost
1230 000

0
-out
man
X = 570000 x
32%

=
18400 ⑯
-

CGP
notget a
GPR =
JAR
2020.

In strivet

res
32 74 .

4460008
>
-
knads Wies
= 30% = 740k -)
BB

]
- 32% =
1230 ove

COGS

incorea S
DEP 2018

zok
31000
67200
180000

210000 Y
x 30%

3 2
-
118000
ifor
Regular sales :

Sales 2 7m.

BB3

D
Freed
24-te 12/12 + 102400 +
660k+

116
:

o
REP 212 gor 2787508

ita 4323000
-

OPEX (150000)
~ Regula 13555000

0 00
& Instalment 2707 ,500

so
. 7
 E
GPR 40%
* interest bearing note Y1 tool
e g Yy300k
1/S Im
Installment sale
.

-
need amotization 42 g00K
go ye 1
= no

RGP ? I
%
collection
Y, 160k > took 40
happens
-

> in longer period

-

X 280k >
-
200X40/
>
-
credit sales
Yo 1201 >
- 300x45/
>
-
doesn't mean a involved in instalment sales ; a are instament sales method
x440k >
-
100k X 40/
use ?
> When to significant doubt
-

of collectibility of A/R

↑ameitest
LOS 9001
- e g she
given but no EPR
.

1/3 1 21
.

DP + installet rea.

common
GPR =?
I DGP = 1RXGPR
or
my other mount
↓

GP
↓
↓
IS -1AR- Fr traded in

↓
+ DP + installment collected
↓
Ro #1000

~
DEPend
sales DGP before auj SP-react pricipul total
↓

R collection -
II

instalment account, x
about
or
Y2 300K
DEP before -

(Daten
1ARX EPR

sales-DP
T

installment

allowHere aencount
Dp +
Y,
Y2

F
-

35%
markup cost given

·
↑ It
in Sales GPR
sales- collection
x

underliest ~ FV of
taled in

b) DGP > instalmet #R X GPR -WGP)

or -

GP
or

↓ Or

markup/GP of
rec .
uncollete
- Tup) Crepo) anout X

time collection ;
Every
2) Instalment
-
reciciably I will ↓
your

Sale :

1/Rec XX

1/3 alas

collectio :

cash *** Re

n
a) Installment
Save
a

·
'AR collectio EGPRct
On

eg . IS% EPR colt f) Gin o his on repo

sold-recon Fu
5
E
or
sold on instalret
Ist
item
e) NI in
table
salves or 1AR

sales-collections-
Clost]

GP
collection Q
amount

↑
X

+
inv/ (trade)
underallowne
↑
9) Overalcounc Net sales
Sales 102
RGP w/ Trade
- -
=

IRXGPR in value
=
(DGPend) > instrument
-
sales x GPR
-
-

>
or
repossed x cost ratio
↑
GPR-
10% markup cost currenter Trade in
-
n
Est SP
Fr-nrecorcont- Collection x
②
140/240
(osson repo) Callorance) (actual Unive) - > Crecon cost
* collection X GPR
or

ROP
-
su A -
↓
m

n
underelle,
Over allowance DP + Actul
tradin installe
+
a
cost of 13 x 17 % of Lost

f) revenue i) collections
h) and to repo
in .

collection who intest

6 unpaid X GPR
InstructSaleso f sales x cost
X GPR ↓

the
Am
TDO
In - XGPR
sales-collection

t
Prior
to
default
Installment sales

revenue recognition (GP)

1. time of sale

2 . Cash collection method

a Some cost method-cost recovery method

b . gross profit realization method

c .
installment method

installment met LD realized gross profit principal collection X GP rate * GP rate always based on sales
only

ex deferred gross profit installment Alr balance x Grate LD if includes interest : remove

sales - 100 , 00 0 L recovered cost Principal collection X cost ratio In it based on colt : convert

-600
Ip unrecovered cost
installment AIR Balance X cost ratio complement of GP rate
* cost ratio :

4
L GP rate =
To

illustration 1 :

inst .
sales 60 , 000 RGP = 2 , 400 18000 X 0 . 3)

cost of / 42 , 000 DGP =

15 , 600 [(00 =
8)x0 .
3) J-should be equal to 18 , 000 (DGP)

7)
=
collection 8000 RC 18000 X0

J
3 600
(cost)
.
,

42 000
should be equal to ,

UC =
36 , 400 [(60-0) x0 .
7]

:
GP rate
03

-
Trade in cost
collection
RGP (T-in) = (C) + collection in kind) (GD % of trade in

trade in allowance

Emv/appraised or fair value

Tin allow > EMV = over allowance (subtract)

Iin allow <emu =

under allowancecaud)
J denominator

reposition

gain/loss reposition journal entry

:

Compare [mu & UC -gain not recorded (contrary to conservatism)

 9/2 to be recorded = O if gain

[mv
-

greater =
gain compute 911 =
compute

-
Emr lower =
loss

net income computation

·
2 types of sales

regular
GP of regular sales (reg salel-cost]

installment add : RGP on installment salel

int income

less :
expenses

342 illustration (
p .

GP on reg sales 99 , 600 - 230k -

130 417
.

RGP sales 29 , 720 >

inst Principal Xaprace add years]
-

on .
collection the 2

int income 50 . 470

exp · operating

33, 000
-

p -
337

Imv = nov of merch/FV of merch

up estimated value
market

La should be before reconditioning colt

recording

at what amt should trade in be recorded : at estimated market value

at what amt should reposition be recorded : at lower between [mu & UC

JEi

installment sales

DD
(dp >
-]
cash 40 , 000 deauct

installment ver 000 1 monthly collections

62 ,

variances in computing RGP

RGD =
(Principal collection
-

loss on reposition) X GP %

RGP

adjustment-acpendalment
= DGP beg . before
-

Alr balance x gorate

 -
p 348

inst .
2015 60k

cocoon
collection

net . Collection

Sk
) (2016) -p current yar a

entry to record repo

repossesed inv ( ?) 30k

def .
GP 10K + 780 -
30)x20%

loss . On 10k

inst . A In 5014