Delta Company sold goods to wholesalers on terms 2/15, net 30. The entity had no cash sales but 50% of the customers took advantage of the discount. The entity used the gross method of recording sales and accounts receivable. An analysis of the trade accounts receivables at year-end revealed the following: Collectible Age 0-15 days 16-30 days 31-60 days Over 60 days Amount 2,000,000 1,400,000 400,000 200,000 4,000,000 100% 95% 90% 50% What amount should be reported as allowance for sales discount at year-end?

Delta Company sold goods to wholesalers on terms 2/15, net 30. The entity had no cash sales but 50% of the customers took advantage of the discount. The entity used the gross method of recording sales and accounts receivable. An analysis of the trade accounts receivables at year-end revealed the following: Collectible Age 0-15 days 16-30 days 31-60 days Over 60 days Amount 2,000,000 1,400,000 400,000 200,000 4,000,000 100% 95% 90% 50% What amount should be reported as allowance for sales discount at year-end?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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