For the next few weeks, the company is offering a 20% trade discount when providing services of $10,000 or m to its customers to encourage customers to buy more services. The company also offers 2/10, n30 on all credit sales. All credit sales are invoiced at the end of the month. The company provided the following services this month; amounts are shown before trade discounts have been deducted: . . . 1. S Provides $12,000 services for Customer A- on account-pays within 10 days Provides $7,000 services for Customer B-on account-pays within 10 days Provides $20,000 services for Customer C-on account-pays within 30 days Provides $8,000 services for Customer D-received payment last month What amount of Service revenue should the company record for Customer A?
For the next few weeks, the company is offering a 20% trade discount when providing services of $10,000 or m to its customers to encourage customers to buy more services. The company also offers 2/10, n30 on all credit sales. All credit sales are invoiced at the end of the month. The company provided the following services this month; amounts are shown before trade discounts have been deducted: . . . 1. S Provides $12,000 services for Customer A- on account-pays within 10 days Provides $7,000 services for Customer B-on account-pays within 10 days Provides $20,000 services for Customer C-on account-pays within 30 days Provides $8,000 services for Customer D-received payment last month What amount of Service revenue should the company record for Customer A?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**For the following questions 1-3**
For the next few weeks, the company is offering a 20% trade discount when providing services of $10,000 or more to its customers to encourage customers to buy more services. The company also offers 2/10, n/30 on all credit sales. All credit sales are invoiced at the end of the month. The company provided the following services this month; amounts are shown before trade discounts have been deducted:
- Provides $12,000 services for Customer A — on account — pays within 10 days
- Provides $7,000 services for Customer B — on account — pays within 10 days
- Provides $20,000 services for Customer C — on account — pays within 30 days
- Provides $8,000 services for Customer D — received payment last month
1. $__________ What amount of Service revenue should the company record for Customer A?
Expert Solution
Step 1: Introduction:
Accounts Receivable:
Sales form an important source of revenue for an enterprise. Sometimes, a certain portion of sales will be made on credit. So, this amount will be considered as the portion of the amount to be received that is, accounts receivable.
The amount will be received by the firm on a future date but a certain portion may not be recovered which is considered as bad debts.
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