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E6-10 (Algo) Reporting Net Sales after Sales Discounts [LO 6-4] During the months of January and February,...

E6-10 (Algo) Reporting Net Sales after Sales Discounts [LO 6-4]
During the months of January and February, Solitaire Corporation sold goods to two customers. The sequence of events was as follows:
January 6 Sold goods for $75 to Wizard Incorporated with terms 2/10, n/60. The goods cost Solitaire $65.
January 16 Sold goods to Spyder Corporation for $65 with terms 1/5, n/30. The goods cost Solitaire $55.
January 14 Collected cash for the amount due from Wizard Incorporated.
February 28 Collected cash for the amount due from Spyder Corporation.
Required:
Compute the Net Sales Solitaire would report over the two months.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

Answer

Net Sales Calculation:

  1. Wizard Incorporated: Sold for $75 with terms 2/10, n/60. Payment was made within the discount period, so a 2% discount applies.
    Discount = $75 * 2% = $1.50
    Net Sales = $75 - $1.50 = $73.50
  2. Spyder Corporation: Sold for $65 with terms 1/5, n/30. Payment was made after the discount period, so no discount applies.
    Net Sales = $65
  3. Total Net Sales: $73.50 (Wizard) + $65 (Spyder) = $138.50

Net Sales Solitaire would report over the two months: $138.50

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