Question

During the months of January and February, Solitare Corporation sold goods to three customers. The sequence of events was as follows: Jan. 6 Sold goods for $160 to Wizard Inc. with terms 2/30, n/60. The goods cost Solitare $73. 9 Sold goods to Spyder Corp. for $89 with terms 2/10, n/30. The goods cost Solitare $63. 14 Collected cash for the amount due from Wizard Inc. Feb. 28 Collected cash for the amount due from Spyder Corp. Required: Compute the total revenue Solitare would report over the two months. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

Answer:

Total revenue to be reported by Solitare over the two months is $249.

Explanation:

Total revenue from:

Sale to Wizard Inc. = $160

+ Sale to Spyder Corp. = $89

Total revenue = $249

Solitaire will have to recognize sales discount from the early payment by Wizard Inc. on January 14, which was 8 days from the date of sale (January 6). Based on Solitaire's credit term to Wizard Inc., Wizard Inc. is entitled to a 2% sales discount upon payment within the 30 days from date of sale.

Sales discount to Wizard Inc. = $160 x 2% = $3.20

This will be deducted to the total revenue to arrive at a net revenue of $246 ($249 - $3.2)