Ask Question
5 March, 18:45

M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1. Total gross sales for the period include the following: Credit card sales (discount 3%) $8,400 Sales on account (1/15, n/60) $10,500 Sales returns related to sales on account were S500. All returns were made before payment. One - half of the remaining sales on account was paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income "statement as net sales?

+4
Answers (1)
  1. 5 March, 22:27
    0
    Answer: $ 18,098

    Explanation:

    (Credit Card Sales - Discount of 3%) = 8400 - 252 = 8148

    Therefore, 8148 is recorded to Sales Revenues and 252 to Contra-Revenues.

    (Sales on Account):

    10,500 - 500 = 10,000

    1/2 utilized and 1% discount so,

    5000 x 99% = 4950

    Therefore, 50 of Contra-Revenue recorded to Sales Discounts.

    So 9950 recorded as Sales of Account Revenue (if distinction is required)

    We now have,

    9950 + 8148 = 18098

    Net Sales = $ 18098
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1. Total gross sales for the period ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers