Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing services to its customers. In March 2012, Garber provided $4,000 of plumbing services to Red Oak, Inc. and $1,500 of services to Cyril, Inc. Each of these customers was granted credit terms of 2/10, net 30. If both customers paid for the plumbing services within the discount period, what was the net sales figure for these two transactions?

Question

Quizplus · Accepted Answer

Trade discount = $4,000 F1F1F1S1F1F1F10 20% = $800. Sales revenue = ($4,000 - $800) + $1,500 = $4,700. Sales discount $4,700 F1F1F1S1F1F1F10 2% = $94. Net sales = $4,700 - $94 = $4,606.

Garber Plumbers Offers a 20% Trade Discount When Providing $2,000