On October 1, Snow Company made a $50,000 sale giving the customer terms of 3/10/net 30. The receivable was collected from the customer on Oct. 8. Considering the collection of cash from the receivable, what effect will the transaction have on the company's statements?

Question

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$50,000 x 3% = $1,500 discount Snow Company would collect $48,500 ($50,000 - $1,500 discount). Assets (cash) would increase by $48,500, assets (accounts receivable) would decrease by $50,000, and sales revenue would decrease by $1,500, which would decrease net income and equity. The company would report a $48,500 cash inflow from operating activities

On October 1, Snow Company Made a $50,000 Sale Giving