INSTALLMENT SALES Note 2 WRITE OFF

Journal Entry:
*Revenue Recognition at the Point in Time
Deferred Gross Profit (at GPR) xxx
Operating Expenses (at Cost Ratio) xxx
A. SALE OF MERCHANDISE INVENTORY
Installment Acct. Rec. (at Gross) xxx
INSTALLMENT SALES DEFERRED GROSS PROFIT
NOTE: Loss on Repossessions and Impairment of IAR in case
RECEIVABLE
of write off, shall be presented in PROFIT/LOSS.
Installment Acct IAR, Beg X GPR
Receivables, Beg xxx xxx
Note 3 COLLECTIONS
(-) Repossessions (xxx) IAR, Repo. Bal X GPR (xxx)
- Collections EXCLUDE interests collected, nut INCLUDES
(-) Write Offs (xxx) IAR, W/O Bal X GPR (xxx)
down payment and Traded in items at its NRV
(-) Collections
- Base on REALIZED GP, which is a YEAR END ADJUSTMENT
(excluding
interests) (xxx) IAR Collections X GPR (xxx)
* INSTALLMENT SALES WITH TRADE INS
Installment Acct
Journal Entry:
Receivables, End xxx IAR, End X GPR xxx
Traded in Item (at NRV) xxx
Over-allowance (plug*) xxx
* TRUE MARKET VALUE/NRV:
Installment Acct. Receivables (excess) xxx
Estimated Selling Price xxx
Installment Sales (at Gross) xxx
(-) Cost to Sell (xxx)
(-) Reconditioning Costs (xxx)
(plug*)
(-) Normal Profit Margin (at GPR of the year of
Trade in Allow (actual) xxx
repossession) (xxx)
(-) True MV/NRV of item (xxx)
True Market Value/NRV xxx Over (Under) Allowance xxx
NOTE: Use of the formula above ONLY, when the FAIR
VALUE IS NOT GIVEN Note:
Installment Sales xxx
* GROSS PROFIT RATE (-) Over-allowance or (xxx)
Installment Sales xxx (+) Under-allowance xxx
(-) Over Allowance for TMV (xxx) Adjusted Sales xxx
(+) Under Allowance for TMV (xxx)
Adjusted Installment Sales xxx B. SALE OF REAL PROPERTY
Cost of Installments Sales xxx
Deferred Gross Profit xxx * CASUAL SALE
Sales Price xxx
Note 1 REPOSSESSIONS (-) Book Value:
Journal Entry: Cost xxx
Repossessed Item (at NRV) xxx Acc. Dep, if any xxx xxx
Deferred Gross Profit (at GPR) xxx Deferred GP xxx
Loss on Repossession (plug*) xxx
Installment Acct. Rec. (at Gross) xxx * AS A REAL ESTATE (INVENTORY)
Sales Price xxx
(plug*) (-) Cost of Sales (xxx)
True MV/ NRV of Repo Item xxx Deferred GP xxx
(-) Unrecovered Cost:
(ISR (at Gross) X Cost Ratio) xxx * RGP IN INSTALLMENT SALES
Gain (Loss) on repossessions xxx Probability of Collection Method Used
Reasonable Accrual Basis
NOTE: Gains on Repossession is NOT RECOGNIZED Remote Cost Recovery Method
Neither of the two Installment Method
* Measurement of Sales Revenue in Installment Sales (IAS
18)
1. Cash (at Face Value)
2. Traded Inventory (True Market Value/FMV)
3. Notes Receivable (at either Present Value or Face
Value, whichever is appropriate)

*Deferred Gross Profit (DGP) is a CONTRA-IAR ACCOUNT