Question

The following information applies to the questions displayed belox Deta Recovery Services (DRS) specializes in dets recovery from crashed hard drives. The price charged veries besed on the extent of damage and the amount of data being recovered. DRS offers a 20% discount to students and faculty at educatonal istituton. Consider the bloeg tensectons during the m re, or Ant June 10 Rashids hard drive crashes and he sends it to DRS June 12 Ater initial evaluation, DRS e-mails Rashid to let him know that full data recovery will cost $2,300 June 13 Rashid informs DRS thet he would like them to recover the data and that he is a student et UCLA qualitying him for a 20% educetional discount and reducing the cost tby s460 ( S2300-20%) June 16 DRS performs the work and claim s to be successful in rec en galldata. DRS asks Rashid to pey within 30 days oftoday's date, offering a 3% discount for payment within June 19 when Rashid receives the hard drive, he notices e at DRS dd not successtly recover al data Appro imately 25% orte aa has not been recoveredad he rfoms bes June 20 DRS reduces the amount Rashid owes by 25%, June 30 Rashid peys the amount owed days. Required information 10.00 points

Answer 1

(1)

Date	Accounts & Explanation	Debit	Credit
June 10	No Entry
June 12	No Entry
June 13	No Entry
June 16	Account Receivables	1840
	To Service Revenue		1840
	(Being service revenue recorded)
June 19	No Entry
June 20	Sales Allowances	460
	To Account Receivables		460
	(Being allowance of 25% provided)
June 30	Cash	1380
	To Account Receivables		1380
	(Being final payment received from Rashid)

(2)

Net revenues in income statement

Total Service revenue    $1840

– Sales allowance           $460

= Net revenue                $1380

(3)

Net revenue if Rashid paid his bill on 25 June;

Net service revenue                            = $1380

Less: Discount @3%                          = $41.4

Net revenue                                        $1338.60