Ask Question
26 February, 01:27

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? Assets = Liab. + Stk. Equity Rev. - Exp. = Net Inc. Stmt of Cash Flows A. (1,500) = NA + (1,500) (1,500) - NA = (1,500) 48,500 OA B. (1,500) = NA + (1,500) (1,500) - NA = (1,500) NA C. (1,500) = NA + (1,500) NA - (1,500) = 500 1,500 OA D. 48,500 = NA + 48,500 48,500 - NA = 48,500 48,500 OA

+3
Answers (1)
  1. 26 February, 02:29
    0
    A. (1,500) = NA + (1,500) (1,500) - NA = (1,500) 48,500 OA

    Explanation:

    Cash discount=$50,000*3%=1,500

    Cash from Customer=$50,000-$1,500=$48,500

    Collection from customer will be reflected in current assets as whole part of total assets.

    Therefore because of cash discount net assets will be reduced by $1,500 as it will no longer be received. Where as Cash of$48,500 will increase net assets.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “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 ...” 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