Question

Music Maker sold inventory for $280,000, terms 4/10, n/30. Cost of goods sold was $156,000. How much sales revenue will Music Maker report from the sale? (Assume the company records sales at the net amount) A. $268.800 B. $156,000 C. $280,000 D. $124,000

Answer 1

To calculate the sales revenue that Music Maker will report from the sale, subtract the discount from the total amount to find the net amount. In this case, the sales revenue will be $268,800.

Step-by-step explanation:

To calculate the sales revenue that Music Maker will report from the sale, we need to calculate the net amount after the discount. The terms 4/10, and n/30 mean that if the payment is made within 10 days, a 4% discount can be availed. Otherwise, the full amount is due within 30 days. So, the net amount after the discount can be calculated by subtracting the discount from the total amount. In this case, the net amount would be $280,000 - (4% of $280,000) = $268,800. Therefore, Music Maker will report a sales revenue of $268,800 from the sale.