Problem 5-81A Effects of Discounts on Sales and Purchases

Helmkamp Products sells golf clubs and accessories to pro shops. Gross sales in 2013 were $2,850,700 (Helmkamps list price) on terms 2/15, n/45. Customers paid for $2,000,000 (Helmkamps 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. $