Question

Wildhorse Co, accepted a national credit card for a $10600 purchase, The cost of the goods sold is $6600, The credit card company charges a 5% fee. What is the impact of this transaction on net operating income?

Answer 1

See below:

Explanation:

To find the impact on Net Operating Income, we take from the sales price the cost of goods sold and the credit card fee:

`color(white)(+)10,600color(white)(00)"Sales Price"`
`color(white)(0)-6,600color(white)(00)"COGS"`
`ul(color(white)(000)-530)color(white)(00)"Credit card processing fee"^1`
`ul(ul(color(white)(0+)3,470))color(white)(00)"To Net Operating Income"`

`color(white)(0)^1`Credit Card Processing Fee: `10,600xx.05=530`