Problem E 5-3 Solution

Problem E 5-3  Solution

E 5-3
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

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