Question

Gammy Corporation provides services with a normal price of $800,000 and a trade discount of $100,000. Terms are 2/10, n/30 and the customers pay within 10 days. The net service revenue is:______.

Answer 1

Answer:

The net service revenue amounts to $686,000

Explanation:

The formula to compute the net service revenue is as:

Net Service Revenue = (Price - Trade discount) - Discount of 2%

where

Price is $800,000

Trade discount is $100,000

And the discount of 2%

Therefore,

NSR = ($800,000 - $100,000) -Discount of 2%

= $700,000 - 2% 0f $700,000

= $700,000 - $14,000

= $686,000

NOTE: The customer paid within 10 days so the customer is allowed for 2% discount on the amount.