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So I can't figure out this problem for accounting..
- Thread starter TecHNooB
- Start date
krunchykrome
Lifer
i'll help also
NS1, Descartes, and Jules, we're waiting for you
NS1, Descartes, and Jules, we're waiting for you
TecHNooB
Diamond Member
HERE'S THE PROBLEM:
Cyndi Corporation reported net accounts receivable on its January 31, 2007 balance sheet of $64,320 (this amount is net of the allowance for doubtful accounts of $4,110). Cyndi Corporation has a January 31 year-end.
Gross sales for the year ended January 31, 2008 totaled $4,521,890 as follows:
Credit sales 606,050
Credit card sales 2,631,300
Cash sales 1,284,540
Total sales $4,521,890
Credit sales represent credit granted by Cyndi Corporation. Credit terms are 2/10, net 60. Credit card sales are customers who pay with a third party credit card (Visa, Mastercard, etc). Cyndi Corporation has negotiated a 3% credit discount with these credit card companies.
Cyndi Corporation allows customers to return items for 90 days from the date of sale. For the year ending January 31, 2008, customers returned items with a sales price of $361,750 as follows:
Credit sales 20,900
Credit card sales 201,900
Cash sales 138,950
Total returns $361,750
Cash customers were given a cash refund, while credit customers were given a credit to their account. The returns by the credit customers were all made before payment was received. Credit card customers get a credit back to their credit card and Cyndi Corporation receives cash back from the credit card issuer less the 3% fee. Note: this is equal to the amount of cash received from the credit card issuer and will reduce the credit card discount recorded by Cyndi Corporation.
For the year ending January 31, 2008, credit customers paid $543,658. Of this amount $36,410 was paid outside the discount period. The balance had the allowed discount deducted from the amount owed (i.e. the amount of cash received is 98% of the amount owed).
For the year ending January 31, 2008, Cyndi Corporation wrote off $12,680 of accounts receivable as uncollectible.
Sales returns, sales discounts, and credit card discounts are recorded as contra-revenues.
Cyndi Corporation reported net accounts receivable on its January 31, 2007 balance sheet of $64,320 (this amount is net of the allowance for doubtful accounts of $4,110). Cyndi Corporation has a January 31 year-end.
Gross sales for the year ended January 31, 2008 totaled $4,521,890 as follows:
Credit sales 606,050
Credit card sales 2,631,300
Cash sales 1,284,540
Total sales $4,521,890
Credit sales represent credit granted by Cyndi Corporation. Credit terms are 2/10, net 60. Credit card sales are customers who pay with a third party credit card (Visa, Mastercard, etc). Cyndi Corporation has negotiated a 3% credit discount with these credit card companies.
Cyndi Corporation allows customers to return items for 90 days from the date of sale. For the year ending January 31, 2008, customers returned items with a sales price of $361,750 as follows:
Credit sales 20,900
Credit card sales 201,900
Cash sales 138,950
Total returns $361,750
Cash customers were given a cash refund, while credit customers were given a credit to their account. The returns by the credit customers were all made before payment was received. Credit card customers get a credit back to their credit card and Cyndi Corporation receives cash back from the credit card issuer less the 3% fee. Note: this is equal to the amount of cash received from the credit card issuer and will reduce the credit card discount recorded by Cyndi Corporation.
For the year ending January 31, 2008, credit customers paid $543,658. Of this amount $36,410 was paid outside the discount period. The balance had the allowed discount deducted from the amount owed (i.e. the amount of cash received is 98% of the amount owed).
For the year ending January 31, 2008, Cyndi Corporation wrote off $12,680 of accounts receivable as uncollectible.
Sales returns, sales discounts, and credit card discounts are recorded as contra-revenues.
TecHNooB
Diamond Member
I need to find accounts receivable at the end of the accounting session. Btw.. as I was posting this, I checked my email to see if my professor has answered my question. Apparently my answer is correct 😵. Anyways, there's multiple parts to this so if I get stuck i'll post where I'm stuck -_-;
EDIT:
Question for anyone who gets this for (hopefully someone is working on it!) Why would you use the gross accounts receivable instead of the net accounts receivable from the first paragraph?
EDIT:
Question for anyone who gets this for (hopefully someone is working on it!) Why would you use the gross accounts receivable instead of the net accounts receivable from the first paragraph?
Christobevii3
Senior member
You would use gross instead of net, because you calculate the 2/10 net 60 as a discount.