Question

During the months of January and February, Solitare Corporation sold goods to two customers. The sequence of events was as follows: Jan. 6 Sold goods for $100 to Wizard Inc. with terms 2/30, n/60. The goods cost Solitare $70. 6 Sold goods to Spyder Corp. for $80 with terms 5/10, n/60. The goods cost Solitare $60. 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.

Answer 1

Answer:

$178

Explanation:

Net Sales:

= Sales (January & February) of wizard and Spyder - Discount allowed to Wizard Inc

= ($100 + $80) - ($100 × 2%)

= $180 - $2

= $178

Gross Profit = Net Sales - Cost of goods sold

                   = $178 - ($70 + $60)

                   = $178 - $130

                   = $48

Therefore, total revenue Solitare would report over the two months is $ 178 with a gross profit of $48.