1. In an effort to increase collections, Bishop Company offers a 1/10, n/30 discount for early payment. Assume a sale of \($150,000\) made on August Ist. Determine the total sales, the sales discount, and the net sales when the customer makes a payment either on (a) August 7th, or (b) August 27th.

2. Bishop Company offers a generous return policy of 60 days, no questions asked, in order to increase its total sales. Unfortunately this policy has the drawback that many people return their purchases during the 60-day period. Bishop Company management has estimated at year-end that approximately six percent of \($1,200,000\) of eligible purchases will be returned. Of this \($1,200,000\) of total sales, determine the sales returns, net sales, and the allowance for sales returns.