Question
In: Accounting
On December 28, 2021. Tristar Communications sold 15 units of its new satellite uplink system to...
On December 28, 2021. Tristar Communications sold 15 units of its new satellite uplink system to various customers for $20,000 each. The terms of each sale were 2/10, n/30. Tristar uses the gross method to account for sales discounts.
In what year will income before tax be affected by discounts, assuming that all customers paid the net-of-discount amount on January 6, 2022? By how much?
Solutions
Expert Solution
Number of units sold = 15
Selling price per unit = $20,000
Sales revenue = Number of units sold x Selling price per unit
= 15 x 20,000
= $300,000
Cash received from customers on January 6, 2022
Discount amount = Sales x Discount percentage
= 300,000 x 2%
= $6,000
Since cash will be received from customers in 2022, hence income before tax will be affected by discount in the year 2022 by $6,000.
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ekkarill92 answered 2 years agoRelated Solutions
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