The following transactions were selected from among those co

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

Nov. 20 Sold 20 items of merchandise to Customer B at an invoice price of $5,500 (total); terms 3/10, n/30.

         25 Sold two items of merchandise to Customer C, who charged the $400 sales price on her Visa credit card. Visa charges Cadence Retailers a 2 percent credit card fee.

         28  Sold 10 identical items of merchandise to Customer D at an invoice price of $9,000 (total); terms 3/10, 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.

Required:

Assume that Sales Returns and Allowances, Sales Discounts, and Credit Card Discounts are treated as contra-revenues; compute net sales for the two months ended December 31. (Do not round your intermediate calculations.)

Solution

Sales revenue($5,500 + $400 + $9,000) $14,900 Less: Sales returns and allowances $900 Less: Sales discounts[($9,000 - $900) x 3%] $243 Less: Credit card discounts($400 x 2%) $8 Net sales $13,749