BA 99.

1 Comprehension Exercise_adeveyra
1. Accounting for installment sales is one area covered by Practical Accounting 2 in the CPA Board Examination. In
relation to this topic, one of the usual accounting problems given is about the computation of Realized Gross Profit.
Realized Gross profit or RGP is computed by multiplying the Gross Profit Rate (GP rate) by collections from
installment sales. The GP rate is computed by dividing the Gross Profit from an installment sale by the cost of such
installment sale. The Gross Profit is the selling price (of the item sold on installment) minus the cost of installment
sales. For example: An item sold on installment for P250,000 the cost of which was P200,000 will have total gross
profit of P50,000. Given this, the GP rate is 20%: P50,000 divided by P250,000. If this sale happened in 2011 and
assuming in 2011 P120,000 was collected from this sale, then Realized Gross Profit for 2011 on this sale is P24,000.
This was computed as P120,000 multiplied by 20% (the GP rate).

BA 99.1 Comprehension Exercise_adeveyra

1. Accounting for installment sales is one area covered by Practical Accounting 2 in the CPA Board Examination. In
relation to this topic, one of the usual accounting problems given is about the computation of Realized Gross Profit.
Realized Gross profit or RGP is computed by multiplying the Gross Profit Rate (GP rate) by collections from
installment sales. The GP rate is computed by dividing the Gross Profit from an installment sale by the cost of such
installment sale. The Gross Profit is the selling price (of the item sold on installment) minus the cost of installment
sales. For example: An item sold on installment for P250,000 the cost of which was P200,000 will have total gross
profit of P50,000. Given this, the GP rate is 20%: P50,000 divided by P250,000. If this sale happened in 2011 and
assuming in 2011 P120,000 was collected from this sale, then Realized Gross Profit for 2011 on this sale is P24,000.
This was computed as P120,000 multiplied by 20% (the GP rate).

BA 99.1 Comprehension Exercise_adeveyra

1. Accounting for installment sales is one area covered by Practical Accounting 2 in the CPA Board Examination. In
relation to this topic, one of the usual accounting problems given is about the computation of Realized Gross Profit.
Realized Gross profit or RGP is computed by multiplying the Gross Profit Rate (GP rate) by collections from
installment sales. The GP rate is computed by dividing the Gross Profit from an installment sale by the cost of such
installment sale. The Gross Profit is the selling price (of the item sold on installment) minus the cost of installment
sales. For example: An item sold on installment for P250,000 the cost of which was P200,000 will have total gross
profit of P50,000. Given this, the GP rate is 20%: P50,000 divided by P250,000. If this sale happened in 2011 and
assuming in 2011 P120,000 was collected from this sale, then Realized Gross Profit for 2011 on this sale is P24,000.
This was computed as P120,000 multiplied by 20% (the GP rate).

BA 99.1 Comprehension Exercise_adeveyra

1. Accounting for installment sales is one area covered by Practical Accounting 2 in the CPA Board Examination. In
relation to this topic, one of the usual accounting problems given is about the computation of Realized Gross Profit.
Realized Gross profit or RGP is computed by multiplying the Gross Profit Rate (GP rate) by collections from
installment sales. The GP rate is computed by dividing the Gross Profit from an installment sale by the cost of such
installment sale. The Gross Profit is the selling price (of the item sold on installment) minus the cost of installment
sales. For example: An item sold on installment for P250,000 the cost of which was P200,000 will have total gross
profit of P50,000. Given this, the GP rate is 20%: P50,000 divided by P250,000. If this sale happened in 2011 and
assuming in 2011 P120,000 was collected from this sale, then Realized Gross Profit for 2011 on this sale is P24,000.
This was computed as P120,000 multiplied by 20% (the GP rate).

BA 99.1 Comprehension Exercise_adeveyra

1. Accounting for installment sales is one area covered by Practical Accounting 2 in the CPA Board Examination. In
relation to this topic, one of the usual accounting problems given is about the computation of Realized Gross Profit.
Realized Gross profit or RGP is computed by multiplying the Gross Profit Rate (GP rate) by collections from
installment sales. The GP rate is computed by dividing the Gross Profit from an installment sale by the cost of such
installment sale. The Gross Profit is the selling price (of the item sold on installment) minus the cost of installment
sales. For example: An item sold on installment for P250,000 the cost of which was P200,000 will have total gross
profit of P50,000. Given this, the GP rate is 20%: P50,000 divided by P250,000. If this sale happened in 2011 and
assuming in 2011 P120,000 was collected from this sale, then Realized Gross Profit for 2011 on this sale is P24,000.
This was computed as P120,000 multiplied by 20% (the GP rate).