The following transactions were selected from among those completed by Cadence Retailers November and December:
Nov. 20 Sold 20 items of merchandise to Customer B at an invoice price of $5,600 (total); terms 3/10, n/30.
Nov. 25 Sold two items of merchandise to Customer C, who charged the $700 sales price on her Visa credit card. Visa charges Cadence Retailers a 2 percent credit card fee.
Nov. 28 Sold 10 identical items of merchandise to Customer D at an invoice price of $9,600 (total); terms 3/10, n/30.
Nov. 29 Customer D returned one of the items purchased on the 28th; the item was defective, and credit was given to the customer.
Dec. 6 Customer D paid the account balance in full.
Dec. 20 Customer B paid in full for the invoice of November 20.
What is the net sales?
What is Net Sales?
Net sales is total sales or revenues less any sales discounts, sales returns, and sales allowances. Sales discounts are the cash discounts taken up by the customers. Sales returns are the returned items and sales allowance represents an amount deducted from the total sales to make up for any defects or errors on the side of the seller.
Answer and Explanation: 1
Let's record first the journal entries of these transactions.
See full answer below.
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fromChapter 1 / Lesson 9
Understand what net sales in a business are, their importance, and their uses. Know the net sales formula and learn how to compute it throughout examples.