Merchandise costing $1,500 is sold for $2,500 on terms 1/30, n/60. If the customer pays within...

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Merchandise costing $1,500 is sold for $2,500 on terms 1/30, n/60. If the customer pays within...

Merchandise costing $1,500 is sold for $2,500 on terms 1/30, n/60. If the customer pays within the discount period, what amount will be reported on the income statement as net sales and as gross profit?

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Answer 1

Answer #1

Sales	$2,500
(-) Sales discount ($2,500 * 0.01)	$25
Net sales	$2,475
(-) Cost of Goods sold	$1,500
Gross profit	$975

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Answer 2

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Merchandise costing $1,500 is sold for $2,500 on terms 1/30, n/60. If the customer pays within...