Total gross sales for the period include the following:
credit card sales (discount 3%) $ 9,400
sales on account (2/15, n/60) $ 12,000
sales returns related to sales on account were $650. all returns were made before payment. one-half of the remaining sales on account were paid within the discount period. the company treats all discounts and returns as contra-revenues. what amount will be reported on the income statement as net sales?

If all returns were made before payment. One-half of the remaining sales on account were paid within the discount period. The company treats all discounts and returns as contra-revenues. The amount that  will be reported on the income statement as net sales is $20,354.5

First step is to calculate the Total sales

Total sales = $9,400 + $12,000

Total sales = $21,400

Second step is to calculate the discount

Discount= [(($12,000 - $650)÷2×2%) + ($9,400×3%]

Discount=$113.5+$282

Discount=$395.5                                      

Now let determine the amount that will be reported on the income statement as net sales

Net sales= $21,400 - $650-$395.5

Net sales=  $20,354.50

Inconclusion if all returns were made before payment. One-half of the remaining sales on account were paid within the discount period. The company treats all discounts and returns as contra-revenues. The amount that  will be reported on the income statement as net sales is $20,354.5

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The $20,354.50 will be reported on the income statement as net sales

Explanation:

The computation of the net sales is shown below:

= Total sales -  discount on credit card sales - sales discount - sales return

where,

total sales = Credit card sales + sales on account

                = $9,400 + $12,000

                = $21,400

Discount on credit card sales = Credit card sales × discount

                                                 = $9,400 × 3%

                                                 = $282

Sales discount = (Sales on account - sales return × 0.5(Half payment) × 2%)

= ($12,000 - $650) × 0.5 × 2%

= $113.50

And, the sales return = $650

Now  put these values to  the above formula,

So the values equal to

= $21,400 - $282 - $113.50 -  $650

=  $20,354.50

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