Question

On May 1, Carlisle Co. sold inventory to a customer for $1,000 2/10, n/30. Carlisle Co. uses the gross method for reporting sales discounts. The customer paid the account in full on May 20. What will be the Net Sales reported on the Income Statement from these tranactions

Answer 1

Answer:

The Net Sales that will reported on the Income Statement from these transactions is $1,000.

Explanation:

The term "2/10, n/30" implies that the customer will enjoy a 2% discount if it pays within 10 days but must pay the total amount within 30 days.

However, customer paid on May 20 which is outside the 2% discount period. This implies the customer did not enjoy the 2% discount. That is, the customer paid the full amount of $1,000. Therefore, the net sales is $1,000 from these transactions.

Therefore, the Net Sales that will reported on the Income Statement from these transactions is $1,000.