Question

Waterway Company sells goods to Wildhorse Company during 2017. It offers Wildhorse the following rebates based on total sales to Wildhorse. If total sales to Wildhorse are 9,300 units, it will grant a rebate of 2%. If it sells up to 20,600 units, it will grant a rebate of 4%. If it sells up to 28,000 units, it will grant a rebate of 6%. In the first quarter of the year, Waterway sells 10,100 units to Wildhorse at a sales price of $90,900. Waterway, based on past experience, has sold over 39,000 units to Wildhorse, and these sales normally take place in the third quarter of the year. What amount of revenue should Waterway report for the sale of the 10,100 units in the first quarter of the year.

Answer 1

Answer:

Account Receivables 85.446‬ debit

           Sales Revenues         85.446‬ credit

Explanation:

It should consider the rebate of 6% will be achieved considering the past experience

Also 28,000 units per years / 4 quarter per year = 7,00. untis per year

this quarter sales are also sufficient groudn that the rebate will be achieved.

90,900 x (1 - 0.06) = 85.446‬‬ Sales Revenue