Question

The following transactions were selected from the records of Evergreen Company:

July		12		Sold merchandise to Wally Butler, who paid the $1,000 purchase with cash. The goods cost Evergreen Company $600.
		15		Sold merchandise to Claudio’s Chair Company at a selling price of $5,000 on terms 3/10, n/30. The goods cost Evergreen Company $3,500.
		16		Sold merchandise to Otto’s Ottomans at a selling price of $3,000 on terms 3/10, n/30. The goods cost Evergreen Company $1,900.
		23		Received cash from Claudio’s Chair Company for the amount due from July 15.
		31		Received cash from Otto’s Ottomans for the amount due from July 16.

Required:

Compute the amount of revenue to be reported for the month ended July 31.

Answer 1

COMPUTATION OF AMOUNT OF REVENUE TO BE REPORTED FOR THE MONTH ENDED JULY 31.

JULY 12, Merchandise Sold = $1000

JULY 15, Merchandise sold = $5000

JULY 16, Merchandise sold    = $3000

(-) Cost of goods sold on july 12 = ($600)

(-) Cost of goods sold on july 15 = ($3500)

(-) Cost of goods sold on july 16 = ($1900)

(-) Discount on merchandise

Sold on july15 ( 5000×3% )    = ($1500)

____________

NET REVENUE TO BE REPORTED   = $1500.

And There is no discount allowed to Otto's ottomans as they paid after 10 days credit period.