Question

E6-3 Reporting Net Sales with Credit Sales, Sales Discounts, Sales Returns, and Credit Card Sales LO6-1

The following transactions were selected from among those completed by Cadence Retailers November and December:

Nov. 20 Sold 20 items of merchandise to Customer B at an invoice price of $5,800 (total); terms 4/10, n/30.

        25 Sold two items of merchandise to Customer C, who charged the $700 sales price on her Visa credit card. Visa charges Cadence Retailers a 3 percent credit card fee.

        28 Sold 10 identical items of merchandise to Customer D at an invoice price of $9,400 (total); terms 4/10, n/30.

        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.

        20 Customer B paid in full for the invoice of November 20.

Answer 1

Sales revenue	15900.00	=5800+700+9400
Less: Sales returns and allowances (D)	940.00	=9400*1/10
Less: Sales discounts (D)	338.40	=(9400-940)*4%
Less: Credit card discounts	21.00	=700*3%
Net sales	14601	or 14600.60