For what amount should Sales be credited on December 1?
A) $ 5,500.
B) $16,949.
C) $18,182.
D) $17,241.
E) $16,667.

Question

Quizplus · Accepted Answer

The sales revenue recognized in November is $44,828 ($28,207 in cash received + $16,621 in accounts receivable). The total cost of goods sold for the November sales is $27,000. Therefore, the gross profit for the November sales is $17,828. The December 1 sale has a selling price of $20,000 and a cost of goods sold of $12,759 ($7,405 + $5,354). Therefore, the gross profit for the December 1 sale is $7,241. Adding this to the gross profit from November results in a total gross profit of $25,069. Since the December 1 sale is on credit, sales revenue should be credited for the entire selling price of $20,000, resulting in sales being credited for $17,241 ($20,000 - $2,759).

For What Amount Should Sales Be Credited on December 1