To calculate the gain or loss on the repossession, we need to compare the carrying value of the property on the company's books to the appraised value at the time of repossession.
Carrying value of the property = Cost of the property - Total principal payments received
= P60,000 - P60,000 = P0
Since the carrying value is zero, the company did not record any gain or loss on the repossession of the property.
To calculate the realized gross profit in 2014, we first need to determine the total profit on the sale.
Total profit on the sale = Selling price - Cost of the property
= P240,000 - P60,000 = P180,000
Since the company uses the installment method of accounting, only the portion of the profit that has been received as principal payments can be recognized as realized gross profit.
Total principal payments received = Selling price - Balance of the note at the end of 2014
= P240,000 - P180,000 = P60,000
Realized gross profit in 2014 = Total profit on the sale x (Principal payments received / Selling price)
= P180,000 x (P60,000 / P240,000) = P45,000
Therefore, the realized gross profit in 2014 was P45,000.