Question

On August 5, 2021, Sandhill Furniture shipped 50 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $310 each. The cost of shipping the dining sets amounted to $3200 and was paid for by Sandhill Furniture. On December 30, 2021, the consignee reported the sale of 40 dining sets at $810 each. The consignee remitted payment for the amount due after deducting a 5% commission, advertising expense of $560, and installation and setup costs of $740. The amount cash received by Sandhill furniture is_________

Answer 1

Answer:

The amount of cash received by Sandhill furniture is: $29,480

Explanation:

First, let us calculate the total amount sold for the dining sets

unit price = $810 each

number of sets = 40

Total revenue from sales = 810 × 40 = $32,400

Next let us calculate the total cost of operation and commission;

commission = 5% of sales amount

= 5/100 × 32,400 = $1,620

advertising expense = $560

installation setup = $740

Total expenses = 1620 + 560 + 740 = $2,920

Finally, the amount of cash received by Sandhill is the diffrence between the total revenue and total expenses.

Cash received = 32,400 - 2,920 = $29,480