SALES
Sales amount -Debtors Allowances – returns
The sales amount is the amount given in the trial balance.
Debtors Allowances .This amount is also given in the trial balance. Debtors Allowances the total
amount of people who owe you money and who might not pay you. Ke batho ba ba rekileng ka
sekoloto bao go nago le kgonagalo ya gore ba sepatele. That is why we are subtracting the amount
because we already added the credit sales to the sales amount so we are minusing it since we are
not sure if they will be able to pay us back.
Returns – Goods that are damaged that the customers are bringing back, and you have to pay back
their money that is why we are subtracting its amount because people paid before and we added the
amount to sales, now they brought the gods back so we are giving them their money back.
CALCULATIONS
Sales Amount = R7 164 000 (remember it is given in the trial balance)
Debtors Allowances = R84 000 (remember it is also given in the trial balance)`
Returns
In the adjustment we are told that damaged goods are returned so the business granted an
allowance for the damaged goods meaning that the business paid back the money for the damaged
goods.
Furthermore, they say that the original invoice of the goods received was R12 000.
That statement is there to confuse you. The statement means that the business bought these goods
for R12 000 BUT SOLD THE GOODS AT A HIGHER PRICE. Ke bolela gore business e rekile di goods
txewe from supplier ka R12 000 but ya rekixa ka price ya gomido. Price ya godimo ke price ye di
customer di rekilego ka yona. Unfortunately di customer di kreile di goods txeo di le damaged, so
now so they returned them and we have to pay them back their money. But remember, we are given
the cost price which is R12 000 and we are not given the selling prie
NB
COST PRICE – The total price we bought our products with. Tshelete ye re rekileng dilo txa rena txa
go rekixa ka yona.
SELLING PRICE - The total price that we sell our products with. Tshelete ye re rekixago ka yona.
So here we are only given the cost price which is R12 000 and we need to find the selling price,
lebaka la gore re khumane selling price ke gore re swanetxi re khumane amount ye di Customer di
rekileng ka yona so that we can pay them back(minus in Sales) because they returned our goods, so
we have to give them back their money.
REMEMBER THIS FORMULAS
Cost Price = Selling price* 100/100+MarkUp
Selling price = Cost price* 100+MarkUp/ 100
Remember that the formulas are vice versa
Sales amount -Debtors Allowances – returns
The sales amount is the amount given in the trial balance.
Debtors Allowances .This amount is also given in the trial balance. Debtors Allowances the total
amount of people who owe you money and who might not pay you. Ke batho ba ba rekileng ka
sekoloto bao go nago le kgonagalo ya gore ba sepatele. That is why we are subtracting the amount
because we already added the credit sales to the sales amount so we are minusing it since we are
not sure if they will be able to pay us back.
Returns – Goods that are damaged that the customers are bringing back, and you have to pay back
their money that is why we are subtracting its amount because people paid before and we added the
amount to sales, now they brought the gods back so we are giving them their money back.
CALCULATIONS
Sales Amount = R7 164 000 (remember it is given in the trial balance)
Debtors Allowances = R84 000 (remember it is also given in the trial balance)`
Returns
In the adjustment we are told that damaged goods are returned so the business granted an
allowance for the damaged goods meaning that the business paid back the money for the damaged
goods.
Furthermore, they say that the original invoice of the goods received was R12 000.
That statement is there to confuse you. The statement means that the business bought these goods
for R12 000 BUT SOLD THE GOODS AT A HIGHER PRICE. Ke bolela gore business e rekile di goods
txewe from supplier ka R12 000 but ya rekixa ka price ya gomido. Price ya godimo ke price ye di
customer di rekilego ka yona. Unfortunately di customer di kreile di goods txeo di le damaged, so
now so they returned them and we have to pay them back their money. But remember, we are given
the cost price which is R12 000 and we are not given the selling prie
NB
COST PRICE – The total price we bought our products with. Tshelete ye re rekileng dilo txa rena txa
go rekixa ka yona.
SELLING PRICE - The total price that we sell our products with. Tshelete ye re rekixago ka yona.
So here we are only given the cost price which is R12 000 and we need to find the selling price,
lebaka la gore re khumane selling price ke gore re swanetxi re khumane amount ye di Customer di
rekileng ka yona so that we can pay them back(minus in Sales) because they returned our goods, so
we have to give them back their money.
REMEMBER THIS FORMULAS
Cost Price = Selling price* 100/100+MarkUp
Selling price = Cost price* 100+MarkUp/ 100
Remember that the formulas are vice versa
