Demo_for_Chapter_6

Demo_for_Chapter_6 - Wholesale Warehouse Stores sold...

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Wholesale Warehouse Stores sold $950,000 in merchandise during 2005,  $400,000 of which was on credit with terms 2/10, n/30 (75 percent of these  amounts were paid within the discount period), $500,000 was paid with  credit cards (there was a 3 percent credit card discount), and the rest was  paid in cash. On December 31, 2005, the Accounts Receivable balance  was $80,000, and the Allowance for Doubtful Accounts was $3,000 (credit  balance).   Chapter 6 Demo #1            Requirement 1   Compute net sales for 2005, assuming that sales and credit card discounts  are treated as contra-revenues. (Omit the "$" sign in your response.)  Sales Revenue  950,000   Less: Sales Discounts     6,000   Credit Card  Discounts     15,000   Net Sales     929,000   Requirement 2:   Assume that Wholesale uses the percentage of sales method for  estimating bad debt expense and that it estimates that 2 percent of credit 
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This note was uploaded on 11/17/2008 for the course AEM 2210 taught by Professor Little,j. during the Fall '07 term at Cornell.

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Demo_for_Chapter_6 - Wholesale Warehouse Stores sold...

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