Question

Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing services to its customers. In March 2021, Garber provided $4,000 of plumbing services to Red Oak Inc., and $1,500 of services to Cyril Inc. Each of these customers was granted credit terms of 2/10, net 30. If both customers paid for the plumbing services within the discount period, what was the net revenues amount for these two transactions

Answer 1

Answer:

Red Oak 3,136

Cyril Inc 1,470

Total net revenue 4,606

Explanation:

Red Oak

4,000 - 20% trade-in allowance = 3,200

if payment within discount period: 3,200 x 2% = 64

3,200 - 64 = 3,136 for Red Oak

Cyril Inc

1,500 not qualificable for allowance

payment within discount period

1,500 x 2% = 30

1,500 - 30 = 1,470 for Cyril Inc