M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1. Total gross sales for the period include the following: Credit card sales (discount 3%) $8,400 Sales on account (1/15, n/60) $10,500 Sales returns related to sales on account were S500. All returns were made before payment. One - half of the remaining sales on account was paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income "statement as net sales?

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21 November, 11:38

M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1. Total gross sales for the period include the following: Credit card sales (discount 3%) $8,400 Sales on account (1/15, n/60) $10,500 Sales returns related to sales on account were S500. All returns were made before payment. One - half of the remaining sales on account was paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income "statement as net sales?

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Christine Morrison · Answer 1

Answer: $ 18,098

Explanation:

(Credit Card Sales - Discount of 3%) = 8400 - 252 = 8148

Therefore, 8148 is recorded to Sales Revenues and 252 to Contra-Revenues.

(Sales on Account):

10,500 - 500 = 10,000

1/2 utilized and 1% discount so,

5000 x 99% = 4950

Therefore, 50 of Contra-Revenue recorded to Sales Discounts.

So 9950 recorded as Sales of Account Revenue (if distinction is required)

We now have,

9950 + 8148 = 18098

Net Sales = $ 18098