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?
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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On December 28, 2021. Tristar Communications sold 15 units of its new satellite uplink system to...