Question

The following transactions were selected from the records of Evergreen Company:

July		12		Sold merchandise to Wally Butler, who paid the $1,160 purchase with cash. The goods cost Evergreen Company $680.
		17		Sold merchandise to Claudio’s Chair Company at a selling price of $5,160 on terms 3/10, n/30. The goods cost Evergreen Company $3,580.
		18		Sold merchandise to Otto’s Ottomans at a selling price of $3,080 on terms 3/10, n/30. The goods cost Evergreen Company $1,980.
		23		Received cash from Claudio’s Chair Company for the amount due from Jul-17.
		31		Received cash from Otto’s Ottomans for the amount due from July Jul-18.

Required:

Compute the amount of revenue to be reported for the month ended July 31. (Round your answer to 2 decimal places.)

Answer 1

Sales revenue on July 12 = $1,160

Net Sales revenue for July 17 = sales - sales discount

= 5,160- 5,160 x 3/100

= 5,160-154.80

= $5,005.20

Sales revenue on July 18 = $3,080

Total revenue for July = Sales revenue on July 12 + Net Sales revenue for July 17 + Sales revenue on July 18

= 1,160+5,005.20+3,080

= $9,245.20

The amount of revenue to be reported for the month ended July 31 = $9,245.20

Note: Since goods were sold to Claudio company on July 17 under terms 3/10, n/30 and payment was received from the company within the discount period, hence 3% discount will be allowed to the Claudio company.

No discount will be allowed to Otto Ottomans since payment was received from them after the discount period.

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