Question

Below are account balances from the General Ledger:

Sales: $75,000
• Sales Discounts: $5,500
Sales Returns and Allowances: $7,500
Purchases: $38,500
Transportation In: $1,800
Purchases Discounts: $600
Purchase Returns and Allowances: $1,500
What will be Net Sales reported on the Income Statement?

Answer 1

Net Sales is calculated by subtracting Sales Discounts and Sales Returns and Allowances from Sales. In this case, Net Sales is $75,000 - $5,500 - $7,500 = $62,000.