Question

"Weston Jewelers uses the perpetual inventory system. On April​ 2, Weston sold merchandise with a cost of​ $5,000 for​ $10,000 to a customer on account with terms of​ 2/15, n/30. On April​ 4, the customer reported damaged​ goods, and Michelin granted a​ $2,000 sales allowance. On April​ 10, Weston received payment from the customer. Calculate the amount of net sales revenue."

Answer 1

Answer:

net sales revenue is $6,800

Explanation:

On April​ 2

Cost of Goods Sold $5,000 (debit)

Merchandise $5,000 (credit)

Being recognition of cost of goods sold

Trade Receivables $10,000 (debit)

Revenue $10,000 (credit)

Being recognition of revenue and trade receivable following a sale on account

April​ 4

Returns Inwards $2,000 (debit)

Trade Receivables $2,000 (credit)

Being recognition of allowance granted on damaged goods

April​ 10

Note that the payment is still within the cash discount period of 15 days

discount is granted on the amount of trade receivable balance outstanding

Balance outstanding: $10,000 - $2,000 = $8,000

Cash $6,800 (debit)

Trade Receivables $6,800 (credit)