Kim Company Uses the Installment Method of Revenue Recognition Required:
A

Essay

Kim Company uses the installment method of revenue recognition.The following data pertain to Kim's installment sales for the years ended December 31,2013 and 2014:
$$\begin{array} { | l | r | r | } \hline & \underline { \mathbf { 2 0 1 3 } } & \underline { \mathbf { 2 0 1 4 } } \\\hline \text { Installment receivables at year-end on } 2013 \text { sales } & \$ 120,000 & \$ 60,000 \\\hline \text { Installment reecivables at year-end on } 2014 \text { sales } & & 138,000 \\\hline \text { Installment sales } & 160,000 & 180,000 \\\hline \text { Cost of goods sold } & 80,000 & 108,000 \\\hline\end{array}$$
Required:
a.What amount should Kim report as deferred gross profit in its December 31,2013 and 2014 balance sheets?
b.What amounts should Kim report as realized gross profit in its 2013 and 2014 income statements?