Example 1 From the information of Felix, calculate the sales of the business during a given period. ₦ Cash…

Question

Example 1 From the information of Felix, calculate the sales of the business during a given period. ₦ Cash spent on wages 8,000 Cash withdrawn by the proprietor 5,000 Payment of school fees 3,000 Cash sales banked 15,000 ₦ Cheque received from account receivables 73,000Account receivable at the beginning of the year 7,000 Account receivable at the end of the year 8,000 Discount allowed to account receivables 1,000

ScanSolve AI Tutor · Accepted Answer

To calculate the total sales of the business, we need to consider both cash sales and credit sales.

Calculate the credit sales for the period.
Credit sales can be determined by reconciling the accounts receivable balance.
$\text{Credit Sales} = \text{Closing Accounts Receivable} + \text{Cash received from debtors} + \text{Discount allowed} - \text{Opening Accounts Receivable}$ $\text{Credit Sales} = \text{₦}8,000 + \text{₦}73,000 + \text{₦}1,000 - \text{₦}7,000$ $\text{Credit Sales} = \text{₦}82,000 - \text{₦}7,000$ $\text{Credit Sales} = \text{₦}75,000$
Calculate the total sales.
Total sales are the sum of cash sales and credit sales.
$\text{Total Sales} = \text{Cash Sales} + \text{Credit Sales}$ $\text{Total Sales} = \text{₦}15,000 + \text{₦}75,000$ $\text{Total Sales} = \boxed{\text{₦}90,000}$

Answer

Step-by-step solution

Calculate the credit sales for the period.

Calculate the total sales.

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