EFFECTS OF DISCOUNTS ON SALES AND PURCHASES. Helmkamp Products sells golf clubs and accessories to pro shops. During 19x5, Helmkamp purchased merchandise with a list price of $628,500 on terms 2/10, n/30. Helmkamp paid for $555,000 (suppliers’ list price) of the purchases within the discount period and the remaining $73,500 (suppliers’ list price) after the discount period ended. Sales in 19x5 were $1,150,200 (Helmkamp’s list price) on terms 3/15, n/45. Customers paid for $822,800 (Helmkamp’s list price) of the merchandise within the discount period and the remaining $327,400 after the end of the discount period. Helmkamp records purchases and sales using the gross method. lol REQUIRED:
1. Compute the balance of the purchases account and the amount of net purchases.
2. Compute the balance of the sales revenue account and the amount of net sales.
3. How much cash was expended for these purchases?
4. How much cash was collected from these sales?