Question

Main Street Distributors, a wholesale firm, made sales using the following list prices and trade discounts. What amount should be recorded for each sale? List price of $3,400 and trade discounts of 20 percent and 10 percent. List price of $4,100 and trade discounts of 20 percent and 10 percent. List price of $2,450 and trade discounts of 30 percent and 20 percent.

Answer 1

Answer: Amount should be recorded for each sale are as follows:

Step-by-step explanation:

(a) The amount should be recorded for the list price of $3,400 and trade discounts of 20 percent and 10 percent are as follows:

List price = $3400

Less 20% trade discount on $3400 = 20% × 3400 = ($680)

Balance = $2720

Less 10% trade discount on $2720 =10% × 2720 = ($272)

The amount recorded for sales = 2720 - 272 = $2448

(b) The amount should be recorded for the list price of $4,100 and trade discounts of 20 percent and 10 percent are as follows:

List price = $4,100

Less 20% trade discount on $4100 = 20% × 4100 = ($820)

Balance = $3280

Less 10% trade discount on $3280 =10% × 3280 = ($328)

The amount recorded for sales = 3280 - 328 = $2952

(c) The amount should be recorded for the list price of $2,450 and trade discounts of 30 percent and 20 percent are as follows:

List price = $2450

Less 30% trade discount on $2450 = 30% ×2450 = ($735)

Balance = $1715

Less 20% trade discount on $1715 = 20% × 1715 = ($343)

The amount recorded for sales = 1715 - 343 = $1372