Question

Samantha Rose Inc. made a $25,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as revenue

Answer 1

Answer:

$24,750

Explanation:

The computation of the amount that should be recorded is shown below"

Sales on account = $25,000

Credit term = 1/15, n/30

Sales discount rate = 1%

Now  

Sales discount = Sales on account × Sales discount rate

= 25,000 × 1%

= $250

So,

Net sales = Sales- Sales discount

= $25,000 - $250

= $24,750