Two different companies, Ripper and Berners, entered into the following inventor
ID: 2491507 • Letter: T
Question
Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system.
December 3 – Ripper Corporation sold inventory on account to Berners Corp. for $499,000, terms 1/10, n/30. This inventory originally cost Ripper $320,000.
December 8 – Berners Corp. returned inventory to Ripper Corporation for a credit of $4,700. Ripper returned this inventory to inventory at its original cost of $3,014.
What is the amount of net sales to be reported on Ripper Corporation's income statement?
Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system.
Explanation / Answer
Computation of Net Sales to be reported in Ripper Corporation's Income Statement
* Since, Berners Corp. pays within 10 days of sale i.e. on December 12 against sales of December 3, it is eligible to receive a discount of 1%.
Computation of Gross Profit Percentage
Date Particulars Amount ($) Dec 3 Sales to Berners Corp. 499,000 Dec 8 Less : Sales Return from Bernrs Corp. 4,700 Gross Sales 494,300 Dec 12 Less : Discount on Sales* 4,943 Net Sales 489,357Related Questions
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