Indicate the most likely time you expect sales revenue to be recorded for each of the listed transactions.

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Merchandise invoiced at $9,500 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?

Total gross sales for the period include the following:

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Sales returns related to sales on account were $500. All returns were made before payment. One-half of the remaining sales on account was paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income statement as net sales?

Net sales for the period was $49,000 and cost of sales was $28,000. Compute gross profit percentage for the current year. What does this ratio measure?

Prepare journal entries for each transaction listed.

1. During the period, bad debts are written off in the amount of $22,000.

2. At the end of the period, bad debt expense is estimated to be $13,000.

Using the following categories, indicate the effects of the following transactions. Use + for increase and − for decrease and indicate the accounts affected and the amounts.

1. At the end of the period, bad debt expense is estimated to be $17,000.

2. During the period, bad debts are written off in the amount of $7,000.

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Indicate the most likely effect of the following changes in credit policy on the receivables turnover ratio (+ for increase, − for decrease, and NE for no effect).

1. Granted credit with shorter payment deadlines.

2. Increased effectiveness of collection methods.

3. Granted credit to less creditworthy customers.

Indicate whether the following items would be added (+) or subtracted (-) from the company’s books or the bank statement during the construction of a bank reconciliation.

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A sale is made for $8,000; terms are 1/10, n/30. At what amount should the sale be recorded under the gross method of recording sales discounts? Give the required entry. Also give the collection entry, assuming that it is during the discount period.