Lesson 4 P2: Installment Sales - Notes

1. Gross Profit Rate (GPR)

2. Realized Gross Profit (RGP)
        RGP, end = Collections x GPR
         *Collections does not include unpaid defaults.

3. Deferred Gross Profit (DGP)
       DGP, end = Installment A/R, end  x  GPR
or;
       DGP, end = DGP, beg - RGP

4. Repossession

5. Trade-in

         *Fair Value/True Worth of Repo and Trade-in have the same computation.

*Cost Recovery Method = used when collectibility is highly uncertain.