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3 January, 09:42

During the months of January and February, Solitare Corporation sold goods to three customers. The sequence of events was as follows: Jan. 6 Sold goods for $160 to Wizard Inc. with terms 2/30, n/60. The goods cost Solitare $73. 9 Sold goods to Spyder Corp. for $89 with terms 2/10, n/30. The goods cost Solitare $63. 14 Collected cash for the amount due from Wizard Inc. Feb. 28 Collected cash for the amount due from Spyder Corp. Required: Compute the total revenue Solitare would report over the two months. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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  1. 3 January, 12:27
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    Total revenue to be reported by Solitare over the two months is $249.

    Explanation:

    Total revenue from:

    Sale to Wizard Inc. = $160

    + Sale to Spyder Corp. = $89

    Total revenue = $249

    Solitaire will have to recognize sales discount from the early payment by Wizard Inc. on January 14, which was 8 days from the date of sale (January 6). Based on Solitaire's credit term to Wizard Inc., Wizard Inc. is entitled to a 2% sales discount upon payment within the 30 days from date of sale.

    Sales discount to Wizard Inc. = $160 x 2% = $3.20

    This will be deducted to the total revenue to arrive at a net revenue of $246 ($249 - $3.2)
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