Question

In: Accounting

During the months of January and February, Solitare Corporation sold goods to two customers. The sequence...

During the months of January and February, Solitare Corporation sold goods to two customers. The sequence of events was as follows: Jan. 6 Sold goods for $100 to Wizard Inc. with terms 2/30, n/60. The goods cost Solitare $70. 6 Sold goods to Spyder Corp. for $80 with terms 5/10, n/60. The goods cost Solitare $60. 14 Collected cash for the amount due from Wizard Inc. Feb. 28 Collected cash for the amount due from Spyder Corp. Required: Compute the total revenue Solitare would report over the two months.

Solutions

Expert Solution

Answer :

Total revenue Solitare would report over the two months is $ 178 with a gross profit of $ 48.

Particulars Amount ($)
Sales (January & February )

Wizard Inc

$ 100

Spyder Corp

80
Less : Discount allowed to Wizard Inc ($100 × 2%) ( 2)
Net Sales $ 178
Less : Cost of goods sold (70 + 60) (130)
Gross Profit $ 48

Notes-

  • Solitare sold goods to Wizard Inc om Jan, 6th with terms 2/30 , n/60. This means, if Wizard Inc pays within 30 days they will be given a 2 % discount on total amount if not, they have to pay the full amount within 60 days.

Wizard Inc made full payments on Jan 14th ( 8 days) and so they are given 2% discount.

  • Similarly Solitare sold goods to Spyder Corp on Jan 6th with terms 5/10 , n/60 which means Spyder Corp will be entitled to a discount of 5 % on total sale value if paid within 10 days or else they have to pay the full amount within 60 days.

Spyder Corp made payments only on Feb 28th (more than 10 days) hence, not entitled to any discounts. Full amount due is collected.


Related Solutions

Abel Corporation uses customers served as its measure of activity. During February, the company budgeted for...
Abel Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,400 customers, but actually served 27,600 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.90q Wages and salaries: $34,600 + $1.52q Supplies: $0.92q Insurance: $11,800 Miscellaneous expenses: $7,800 + $0.44q The company reported the following actual results for February: Revenue $ 147,800 Wages and salaries $ 69,400 Supplies $ 15,800...
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for...
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,800 customers, but actually served 27,200 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.30q Wages and salaries: $35,000 + $1.64q Supplies: $1.04q Insurance: $12,200 Miscellaneous expenses: $8,200 + $0.48q The company reported the following actual results for February: Revenue $ 155,800 Wages and salaries $ 69,800 Supplies $ 16,200...
During the month of January, Sundown Corporation had sales of $580,000 and a cost of goods...
During the month of January, Sundown Corporation had sales of $580,000 and a cost of goods available for sale of $1,160,000. The company consistently earns a gross profit rate of 49%. Using the gross profit method, the estimated inventory at January 31 amounts to: $295,800. $864,200. $284,200. $875,800.
During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events...
During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,900 from Diamond Inc. with terms 3/10, n/30. 5 Returned goods costing $1,500 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,400 with terms 3/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Assume Ace records discounts using the gross method in...
Snowfall in the City of Cleveland for the winter months (defined as January, February, and March)...
Snowfall in the City of Cleveland for the winter months (defined as January, February, and March) is distributed as a Poisson random variable, with an average of 5 inches per month. What is the probability that there will be at least 13 inches of snow in the City of Cleveland next March? ANSWER:  (Use only the appropriate formula and/or statistical table in your textbook to answer this question. Report your answer as to 4 decimal places, using conventional rounding rules. What...
During the current year, merchandise is sold for $8,920,000. The cost of the goods sold is...
During the current year, merchandise is sold for $8,920,000. The cost of the goods sold is $6,065,600. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. What is the amount of the gross profit? Round your answer to the nearest dollar. $   Compute the gross profit percentage (gross profit divided by sales). Round your answer to the nearest whole number. % Will the...
A business sells $ 60,000 and $ 80,000 worth of goods in January and February respectively....
A business sells $ 60,000 and $ 80,000 worth of goods in January and February respectively. The controller indicates that 50% of the customers pay their bills on a cash basis, 40% in 30 days and 10% in 60 days. During the month of January and February, the company purchased 30,000 and $50,000 worth of goods from suppliers respectively. The company’s policy is to pay 50% on a cash basis and the other 50% during the following 30 days. The...
Taran Company incurred the following costs for the months of January and February. Type of Cost...
Taran Company incurred the following costs for the months of January and February. Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 5,000 Depreciation 3,500 3,500 Materials 10,000 20,000 From the information above we can assume that a. output decreased from January to February. b. insurance is a mixed cost. c. output stayed the same from January to February. d. insurance and depreciation are fixed costs
ONE: Chrystal Company incurred the following costs for the months of January and February: Type of...
ONE: Chrystal Company incurred the following costs for the months of January and February: Type of Cost January / February Insurance $7,000 $7,000 Utilities 2,600 3,800 Depreciation 2,000 2,000 Materials 5,000 8,000 Assume that output was 1,000 units in January and 3,000 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $2,000. What was the variable rate per unit of output for utilities cost? a.$0.40 b.$0.60 c.$0.20 d.$0.30 TWO: If production volume decreases...
Taran Company incurred the following costs for the months of January and February: Type of Cost...
Taran Company incurred the following costs for the months of January and February: Type of Cost January February Insurance $ 5,000 $ 5,000 Utilities 4,000 5,000 Depreciation 3,500 3,500 Materials 10,000 20,000 If output was 5,000 units in January and 10,000 units in February, we can assume that: a.utilities and materials are variable costs. b.utilities, insurance, and depreciation are fixed costs. c.materials are the only variable cost. d.insurance and depreciation are mixed costs.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT