EFFECTS OF DISCOUNTS ON SALES AND PURCHASES Smithson Products sells shoes and accessories to retail stores. Gross sales in 2009 were

$1,500,250 (Smithson’s list price) on terms 2/10, n/30. Customers paid for $925,500

(Smithson’s list price) of the merchandise within the discount period and the remaining

$574,750 after the end of the discount period. Smithson records purchases and sales using the gross method to account for sales discounts.

Required:

. Compute the amount of net sales.

. Determine how much cash was collected from sales.