28.03.2023 - 10:04

Wright sells softball equipment. On November 14 they shipped $1000 worth of softball uniforms to Paola Middle School terms 2/10 n/30. On November 21 they received an order from Douglas High School for $600 worth of custom printed bats to be produced in De

Wright sells softball equipment. On November 14 they shipped $1000 worth of softball uniforms to Paola Middle School terms 2/10 n/30. On November 21 they received an order from Douglas High School for $600 worth of custom printed bats to be produced in December. On November 30 Paola Middle School returned $100 of defective merchandise. Wright has received no payments from either school as of month-end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30?

a. $900

b. $1500

c. $1600

d. $1000

Answers (1)
  • Ckuznetsova
    April 1, 2023 в 13:48

    The net accounts receivable as of November 30 can be calculated as follows:

    Accounts Receivable from Paola Middle School = $1000 - $100 (returned merchandise) = $900 Accounts Receivable from Douglas High School = $600

    Total Accounts Receivable = $900 + $600 = $1500

    Since the terms of the sale to Paola Middle School were "2/10, n/30", this means that the buyer can take a 2% discount if they pay within 10 days, otherwise the full amount is due within 30 days. Since no payment has been received from Paola Middle School as of month-end, the discount is not applicable and the full amount of $900 is recognized as accounts receivable.

    Therefore, the correct answer is option (b) $1500.

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