Item 12Item 12 On April 1, Snell Company made a $50,000 sale giving the customer terms of 3/10, n/30. The receivable was collected from the customer on April 8. How does the collection of cash from the customer affect the company's financial statements

See explanation section

Explanation:

We know, 3/10, n/30 means the customer will get 3% discount if he/she gives the payment within 10 days, however, he/she has to pay the money within 30 days.

As Snell company sold the products on April 1, and received the payment on April 8, the company gave a 3% discount to customer. As there is discount, the financial statements will be as follows:

Income statement

Sales = $50,000

Less: Sales discount = (1,500)

$50,000 * 3%

Net sales $48,500