Question

Skysong, Inc. accepted a national credit card for a $9400 purchase. The cost of the goods sold is $5400. The credit card company charges a 5% fee. What is the impact of this transaction on net operating income?

Answer 1

Answer: Increase by $3,730

Step-by-step explanation:

The Credit Card amount will count towards Revenue Earned.

The interest payment would then be,

= 5,400* 0.05

= $270

This Credit Card fee will have to be subtracted from the revenue.

Calculating the Net Income we have,

= Revenue - Cost of Goods Sold - Credit Card charges

= 9,400 - 5,400 - 270

=$3,730

Net Income INCREASED by $3,730

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