Helmkamp Products sells golf clubs and accessories to pro shops. Gross sales in 2011 were $2,850,700 (Helmkamp’s list price) on terms 2/15, n/45. Customers paid for $2,000,000 (Helmkamp’s list price) of the merchandise within the discount period and the remaining $850,700 after the end of the discount period. Helmkamp records purchases and sales using the gross method to account for sales discounts.
Required:
1. Compute the amount of net sales.
2. Determine how much cash was collected from sales.