The following transactions were selected from the records of OceanView Company J

Question

The following transactions were selected from the records of OceanView Company July 12 Sold merchandise to Customer R, who charged the $3,000 purchase on his Visa credit card. Visa charges OceanView a 2 percent credit card foe. 15 Sold merchandise to Customer S at an invoice price of $9,000; terms 3/10, n/30. 20 Sold merchandise to Customer T at an invoice price of $4,000, terms 3/10, n/30 23 Collected payment from Customer S from July 15 sale. Aug 25 Collected payment from Customer T from July 20 sale. Required: Assuming that Sales Discounts and Credit Card Discounts are treated as contra-revenues, compute net sales for the two months ended August 31

Explanation / Answer

Sales revenue = $3,000 + $9,000 + $4000 = $16,000

Less : Credit card discount = 3,000*2% = $60

Less : Discount to Customer S = $9,000 *3% = $270 ( PAid within 10 days, so eligible for discount)

Net sales = $15,670

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