In: Finance
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.)
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 ) |