Question

" . LO 6-4 25 6 Reporting Net Sales with Credit Sales, Sales Discounts, and Sales Returns The following transactions were selected from among those completed by Bear's Retail Store: Nov. 20 Sold two items of merchandise to Cheryl Jahn, who paid the $400 sales price in cash. The goods cost Bear's $300. Sold 20 items of merchandise to Vasko Athletics at a selling price of $4,000 (total); terms 3/10, n/30. The goods cost Bear's $2,500. 28 Sold 10 identical items of merchandise to Nancy's Gym at a selling price of $6,000 (total); terms 3/10, n/30. The goods cost Bear's $4,000. 29 Nancy's Gym returned one of the items purchased on the 28th. The item was in perfect condition and credit was given to the customer. Dec. 6 Nancy's Gym paid the account balance in full. 30 Vasko Athletics paid in full for the invoice of November 25, Required: Assuming that Sales Returns and Sales Discounts are reported as contra-revenues, compute Net Sales for the two months ended December 31. c alor Discounts 196-4

Answer 1

Solution: Net sales = $ 9,638

Calculation of Net Sales:

Date	Particulars	Amount	Calculation
Nov. 20	Sales	$                     400	Given
Nov. 25	Sales	$                 4,000	Given
Nov. 28	Sales	$                 6,000	Given
Nov. 29	Sales Returns	$                   (600)	6000/10
Dec. 6	Sales Discount	$                   (162)	(6000-600)*3/100
Net sales		$                 9,638

Notes:

1) Nancy`s Gym returned one unit out of 10 units purchased. So, returns value is $600 ($6,000 / 10 Units).

2) Nancy`s Gym has paid within 10 days and taken the sales discount of 3% on $5400($6000 - $600 )

3) Vasko Athletics has paid after 10 days. So, there will no sales discount.