1 / 82

Cash Sales and Sales on Account

Learn about cash sales and sales on account, including how to prove cash, sales invoices, credit memos, and customer account balances.

rmeadows
Download Presentation

Cash Sales and Sales on Account

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 10 Sales and Marketing

  2. 10-1 Cash Sales and Sales on Account • Proving Cash • Most cash registers are really computer terminals with a display screen and a scanner that is connected to a computer. • The scanner reads bar codes that tells what department, how many, what size and what product is purchased. • Computers/Cash registers also calculate sales tax, totals the sale and updates inventory records • Proving Cash – counting the money in the drawer and checking this amount against the cash register readings to see if the right amount is there.

  3. Why do we have to prove cash?

  4. Every cash register needs to have start up cash…this is referred to as your cash fund or start up cash. • If you have more cash than you should, your are cash over, if you have less cash than you should then you are cash short. • EX: Gretchen works as a cashier for Tops. When she started work, she put $100 in her cash register drawers at the end of her work period, her register readings should total cash received $4,672.98, and total cash paid out, $68.42. When she counted the cash in her drawer, she found $4,702.56. Was she over or short? • She is short by $2.00 • Do A & B on page 419

  5. Sales Invoice and Credit Memo • When a seller sells goods to a buyer on credit, the seller gives the customer a sales invoice. • A sales invoice lists the good sold and delivered to the buyer. The buyer calls this form a purchase invoice…invoice is the same thing as a bill. • Credit Memo – when you buy something on credit and you need to return it, then the company gives you a credit memo…this amount can be deducted from your bill. • Do C & D on page 421

  6. Customer Account Balance • Most people use cash or credit to purchase items, however, businesses generally let people purchase items on credit or on account. • At the end of the month bills are then paid for all purchases and credits….you need to keep track of all bills and credits. • Look at page 131 in workbook… and do it together..

  7. Please get out the following: Whiteboard, marker, rag Notes from yesterday Calculator Pen/Pencil

  8. The customer account for Retro Hardware showed a balance of $2,384.76 on August 1. Sales to Retro we Invoice # 1823 for $500.15 on August 3 and Invoice #1956 for $841.56 on August 9. A payment of $2,884.91 was received on August 13. Credit memo #112 was issued to Retro for $56.73 on August 16. There were no other transactions in August. What was Retro’s account balance on August 31? $784.83

  9. Mint Wholesale’s customer account for Laurel Place Markets showed a balance of $29,379 on November 1. On November 13 a payment of $21,893 was received from Laurel. Laurel was charged $8,112 for purchases made on Invoice #1876 on November 16. On November 25 Mint issued Laurenl a credit memo for $2,570 for stock that was recalled by the manufactureer. What was Laurel’s account balance on November 25? $13,028

  10. Warm Up..(show ALL work on white boards and circle answer) At the start of the day, March 6, Marsha put $100 change fund in her cash register. The cash register readings at the and of the day showed total cash received, $3,283.86, and total cash paid out, $45.31. The cash in the register at the end of the day was $3,338.37. Was the cash drawer over or short and by how much? $.18 short

  11. Warm Up..(show ALL work on white boards and circle answer) Annette had $140 in changed in her cash register at the start of work on March 19. At the end of her work period, there was $2,961.19 in the cash register. The register totals showed that she received $2,983.27 and paid out $159.76 during the period. How much was the cash over or short? $2.32 short

  12. $ 1,472.40 Warm Up..(show ALL work on white boards and circle answer) Risco Products sold these items to Sponson’s Flooring: 60 cases of floor tile @ $24.54 a case 12 gallons of adhesive @ $31.89 a gallon 12 tile cutters @ $48.23 each What was the total of the sales invoice? $ 382.68 $ 578.76 $2,433.84

  13. Using your whiteboards and your table partner, list any incentives a company could give so they get their bill paid sooner.

  14. 10-2 Cash and Trade Discounts • Most business to business transactions begin with a purchase order…this is a form from the buyer that states all the details of the purchase and confirms money has been designated for this purchase.(it is an order for a purchase) • Most businesses get 30 days to pay a bill..this is called the credit period.

  15. 10-2 Cash and Trade Discounts • Cash discounts – a discount given to people to encourage them to pay their invoices early…usually expressed as 1/30…this means a person will get a 1% discount if their bill is paid within 30 days • You may also see 5/10, n/30..this means you will get a 5% discount if paid within the next 10 days or the whole thing is due within 30 days.

  16. If the bookstore received an invoice dated 3/15 and the terms were net 10, what date should the bill be paid by?

  17. I was given an invoice dated 5/11 from KDH Imprint for 40 monogrammed sweatshirts they sold me at $25.50 each.The terms on the invoice were 10/10, n/30. What is the last date my bill is due? June 10th What is the last date my bill is due that I can still get a discount? May 21st If I paid my invoice on 5/16, what should I owe? 40 * $25.50=$1,020 $1,020 * .1 = $102 $1,020 – $102 = $918.00

  18. I was given an invoice dated 6/15 from KDH Imprint for 45 pairs of pants they sold me at $22.50 each.The terms on the invoice were 10/15, n/30. What is the last date my bill is due? July 15th What is the last date my bill is due that I can still get a discount? June 30th If I paid my invoice on 6/20, what should I owe? 45* $22.50=$1,012.50 $1,020 * .1 = $101.25 $1,012.50 – $101.25 = $911.25

  19. Credit terms of 1/15, n/30 appear on an invoice dated November 28. What are the discount date and the due date of the invoice? Dec. 13 and Dec. 28

  20. An invoice dated March 20 has credit terms of 3/15, 1/30, n/45. Find the discount dates and due date of the invoice. April 4, April 19, and May 4

  21. What if the bookstore received an invoice dated 2/14 and terms are 3/10 EOM, what does this mean? This means that the buyer can claim a 3% discount if the bill is paid within 10 days after the end of month shown on the invoice.

  22. Find the cash discount and the cash price of a $23,747 invoice if the invoice is paid within the first discount period. The credit terms are 4/5, 1/30, n/60. $949.88, $22,797.12

  23. An invoice dated July 28 totals $12,836. Credit terms are 2/15, 1/30, n/45. If the invoice totals paid on August 13, what are the cash discount and the cash price? $128.36, $12,707.64

  24. Homework… Page 132 in workbook…this will be graded tomorrow.

  25. 10-2 Cash and Trade Discounts • Trade Discounts – these are reductions from the list price to their business customers. Different discounts may apply to different customers and different products. Sometimes it is because they order a lot of products, sometimes it is to get rid of a product.

  26. If I have an invoice for $560.00 and I get a trade discount of 25% plus 8.75% tax, what is the total amount I owe on the invoice? Find discount…560 * .25 = $140 $560 – 140 = $420 Apply tax.. $420 * .0875 = $36.75 Add taxes and pay bill $420 + $36.75 = $456.75

  27. Rate of Discounts • Rate of Discounts – this is similar to asking what the % decrease is….take the difference between the list price and the discount price and then divide it by the list price. • Ex: An invoice totaling $5,200 was paid within the discount period. The amount paid was $5,070. What was the rate of cash discount… • 5,200-5,070 =130 • 130/5,200 = .025 or 2.5%

  28. Ex: A swimsuit with a list price of $75 was sold to a retailer for $41.25. What was the amount and rate of trade discount? • $75 - $41.25 = $33.75 • $33.75 / $75 = .45 or 45%

  29. Let’s look at your homeworkWorkbook page 132

  30. Get out notebook and write the following vocabulary words down… • Cash discount – a discount given as an incentive to pay the invoice early. • Trade discount – a discount given to certain customers because they do a lot of business together.

  31. 10-3 Series Discounts • Some wholesalers may give a trade discount that has two or more discounts, called a discount series or a series of discounts. • EX: The trade discount may be 20%, 15%, 10%. The means that three discounts are applied one after the other.

  32. If I have an invoice for $640.00 and I get a series discount of 15%, 10%, what is the final amount that I owe on this invoice? Here are the steps to calculate: $640 * .15 = $96.00 $640 – $96 = $544 $544 * .10 = $54.40 $544 – $54.40 = $489.60 (Is there an easier way to calculate?) 640 * .85, then * .90 = $489.60 Why don’t they just give a 25% discount? Because then they would be giving a total of $160 which = $480.00

  33. Ex. The list price of a display case is $2,100, less 25%, 10%, and 5%. Find the invoice price and the amount of trade discount. • $2,100 * 25% = 525 • 2,100 – 525 = $1,575.00 • $1,575 * 10% = 157.50 • $1,575 - $157.50=$1,417.50 • $1,417.50 * 5% = $70.875 • $1,417.50 – 70.875 = 1,346.625…1,346.63(invoice price) • $2,100 – 1,346.63 = 753.37…trade discount amount.

  34. Homework… • Pages 133-134 in workbook…only #1-4 1. $161.42 2. $359.04; $320.96 3. $239.70 4. $128.25; $124.85; $3.40

  35. What is….??? • An Invoice? • A Credit memo? • Proving Cash? • List 5 things on an invoice • What does keeping a customer account mean? • What is a cash discount? • What is a trade discount? • What is a series discount?

  36. 10-4 Markup and Markdowns • One way businesses price items is to use markup pricing. • An amount is added to the cost of the goods to cover all other expenses plus a profit. • This amount is known as markup. • The selling price is the price at which the item is actually sold.

  37. Markup and Markdowns • Lisa owns a luggage store and has to buy carry-on luggage for a line she sells for $90. She knows that her markup must be 40% of the selling price to cover expenses and get the net income she wants. What is the highest price she can afford to pay for each piece of luggage?

  38. There are 2 methods: • 1. Subtract the markup rate from 100% to find the cost as a percent and multiply the selling price by the cost as a percent to find the cost.. • 100% - 40% = 60% • 60% x $90 = $54 • 2. Multiply the selling price by the markup rate to find the markup., then subtract the mark up from the selling price to find the cost. • 40% x $90 = $36 • $90-$36 = $54

  39. A wholesaler want to sell a drill to retailers for $45 and earn a markup of 20% on the selling price. What is the most the wholesaler can pay for a drill and get the desired markup? • 100% -20% = 80% • 45 *.80 = $36.00

  40. Marion, a jeweler, wants to set a price of $600 for a bracelet. The markup he wants is 60% of the selling price. What is the most he can pay for the bracelet? • 100% - 60% = 40% • $600 * .40 = $240

  41. Markup and Markdowns • Markdown – is generally what we have considered a discount. • It is a percentage of a marked price. • To move an overstocked item, a discount of 15% is given on a backpack with a marked price of $70. Find the amount of the discount and the selling price. • 70 * .15 = 10.50 • $70 – 10.50 = $59.50

  42. Markup and Markdown review questions: • 1. As the buyer for Rezden Electronics, you are buying a travel alarm clock for a line that sells at $11.98. What is the most you can pay for the clock and maintain a markup of 45% of the selling price? • 100 - .45 = .55 • .55 * 11.98 = $6.59

  43. Your store sells two-way radio sets in two price lines. • An inexpensive set sells for $59.50. A better radio set with more features sells for $115. What is the highest cost price you can pay for each of these lines and make a markup of 48% of the selling price? • $59.50 = $30.94 ($59.50 * .52) • $115 = $59.80 ($115 * .52)

  44. Markdowns: • A man’s suit with a marked price of $270 is being offered at a 20% discount. What is the selling price? • $216.00 • At the end of the selling season a flat of flowers marked at $12.50 is discounted 35%. What is the selling price of the flat? • $8.12

  45. Homework… • Pages 135-137…you may work with a partner…quietly. • Page 135: • 1. $6.59 • 2. $30.94; $59.80 • 3. $42.83 • 4. $4.00 • 5.$1.36

  46. Page 135: • 6. $8.16;3.36 • 7. $32.40; 36% • 8. 75% • 9. 80% • 10. 103.95; 54% • 11. 8.85;50.15

  47. 10-5 Marketing Surveys • Population – all the people in an organization or those surveyed. • Sample population – part of the total population that were surveyed. • Demographic data - includes data such as age, sex, education, marital status, occupation and income. • Respondents – people who answer surveys • Valid – when all questions are properly answered and collected.

  48. Page 445-446 #A -#D • A. 62% • B. 58,400; 73% • C. 16.8% • D. 9.2%

  49. Page 447 • 5. 133; 62.1% • 6. 714 • 7. 40.6%

  50. Homework/Partner work… • Page page 137 #12-14 only and page 138. • Also due tomorrow – Castle Learning Markup/down, Increase/Decrease

More Related