Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2%
Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2%
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 24E: Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January...
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Question
Yellow Company, a distributor of machinery, bought a machine from the manufacturer in
November 2020 for P500,000.
On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2%
discount if paid within 30 days, 1% discount if paid after 30 days, or payabl
e in full within ninetydays if not paid within the discount periods.
However, the customer had the right to return this machine to Yellow Company if it was unable
to resell the machine before the expiration of the ninety-day payment period, in which case the customer’s obligation to Yellow Company would be canceled.
In the net sales for the year ended december 31,2020, what amount should be included for the sale of the machine?
a. 750,000
b. 735,000
c. 742,500
d. 0
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