Asago Co.sold merchandise to Health Co.on account, $18,000, terms 2/15, net 45.The cost of the merchandise sold is $15,500.Asago Co.issued a credit memo for $1,750 for merchandise returned that originally cost $1,400.The Health Co.paid the invoice within the discount period.What is amount of net sales from the above transactions?

Question

Quizplus · Accepted Answer

The net sales from the above transactions can be calculated as follows:

Original invoice amount = $18,000 
Less: Cost of merchandise sold = $15,500 
Add: Cost of merchandise returned = $1,400 
Less: Credit memo issued = $1,750

Net invoice amount = $18,000 - $15,500 + $1,400 - $1,750 = $2,150

Since the Health Co. paid within the discount period, they are entitled to a 2% discount:

Discount = 2% x $18,000 = $360

Amount paid = $18,000 - $360 = $17,640

Therefore, the amount of net sales from the above transactions is $15,925 (amount paid after discount)

Asago CoSold Merchandise to Health Co