E6-3 (Algo) Reporting Net Sales with Credit Sales, Sales Discounts, Sales Returns, and Credit Card Sales...

E6-3 (Algo) Reporting Net Sales with Credit Sales, Sales Discounts, Sales Returns, and Credit Card Sales

The following transactions were selected from among those completed by Bennett Retailers in November and December:

Nov. 20 Sold 20 items of merchandise to Customer B at an invoice price of $6,000 (total); terms 3/10, n/30.

Nov. 25 Sold two items of merchandise to Customer C, who charged the $400 (total) sales price on her Visa credit card. Visa charges Bennett Retailers a 3 percent credit card fee.

Nov. 28 Sold 10 identical items of merchandise to Customer D at an invoice price of $9,900 (total); terms 3/10, n/30.

Nov .29 Customer D returned one of the items purchased on the 28th; the item was defective and credit was given to the customer.

Dec. 6 Customer D paid the account balance in full.

Dec. 20 Customer B paid in full for the invoice of November 20.

Required: Assume that Sales Returns and Allowances, Sales Discounts, and Credit Card Discounts are treated as contra-revenues; compute net sales for the two months ended December 31. (Do not round your intermediate calculations. Round your answer to the nearest whole dollar amount.)

Solutions

Expert Solution

Date	Net sales
Nov 20 -sales	6000
Nov25 -sales ,net of credit card expense	400(1-.03)=388
28-sales	9900
29 -sales return	-990 [9900 *1/10 =990 per item]
Dec 6-sales discount (paid within discount period of 10days from invoice date]	-267.3 [(9900-990=8910*3%]
Dec 20 (collection of receivables after discount period has no effect on sales)	0

Net sales	15030.70 (rounded to 15031 )

jeff jeffy answered 1 year ago

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