Question

The following transactions were selected from the records of OceanView Company:
July 12 Sold merchandise to Customer R, who charged the $3,500 purchase on his Visa credit card. Visa charges OceanView a 2 percent credit card fee.
15 Sold merchandise to Customer S at an invoice price of $10,500; terms 4/10, n/30.
20 Sold merchandise to Customer T at an invoice price of $5,800; terms 4/10, n/30.
23 Collected payment from Customer S from July 15 sale.
Aug. 25 Collected payment from Customer T from July 20 sale.
Required:
a. Assuming that Sales Discounts and Credit Card Discounts are treated as contra-revenues, compute net sales for the two months ended August 31.

Answer 1

Answer:

$19,380

Explanation:

The computation of the net sales for the two months is shown below:

= Sale value of merchandise as on July 12 + Sale value of merchandise  as on June 15 +  Sale value of merchandise  as on July 20 - sales discounts from July 15 sale

= $3,500 + $10,500 + $5,800 - $10,500 × 4%

= $3,500 + $10,500 + $5,800 - $420

= $19,380

Since the payment is collected on June 23 i.e within 10 days so it is eligible for sales discounts

And from July 20 sale no sales discounts is eligible as it is exceeded than 10 days