Compute the Amount of Net Sales for Evergreen Company
What is the total amount of Net Sales to be reported for the month ended July 31?
Compute the total amount of Net Sales for Evergreen Company based on the provided transactions.
The Net Sales to be reported for the month ended July 31 is $8,090.
To calculate the amount of Net Sales for Evergreen Company for the month ended July 31, we need to consider the sales transactions and determine the total credit sales. Net Sales represent the total sales revenue generated by a company from its operations after deducting any sales returns and allowances.
Based on the transactions provided:
July 12: Sold merchandise to Mally Zutler for $1,060 in cash. This transaction does not contribute to Net Sales as it was a cash sale.July 15: Sold merchandise to Claudio's Chair Company for $5,060 on terms of 3/10, n/30.
July 20: Sold merchandise to Otto's Ottomann for $3,030 on terms of 3/10, n/30.
July 23: Received cash from Claudio's Chair Company for the amount due from July 15.
July 31: Received cash from Otto's Ottomann for the amount due from July 20.
In order to calculate Net Sales, we need to focus on credit sales (sales on terms). Therefore, the total credit sales for Evergreen Company would be:
Total Credit Sales = Sales to Claudio's Chair Company + Sales to Otto's Ottomann
Total Credit Sales = $5,060 + $3,030 = $8,090
Hence, the total amount of Net Sales to be reported for Evergreen Company for the month ended July 31 is $8,090.