Question

Financial information is presented below: Operating Expenses$ 90,000 Sales Returns and Allowances18,000 Sales Discounts12,000 Sales Revenue320,000 Cost of Goods Sold174,000 The amount of net sales on the income statement would be

a.$290,000.

b.$302,000.

c.$308,000.

d.$320,000.

Answer 1

a. $290,000

Step-by-step explanation:

The relevant data provided in the question for computing the net sales is here below:-

Sales revenue = $320,000

Sales discounts = $12,000

Sales returns and allowances = $18,000

The computation of net sales on the income statement is shown below:-

The amount of net sales = Sales revenue - Sales discounts - Sales returns and allowances

= $320,000 - $12,000 - $18,000

= $320,000 - $30,000

= $290,000

Therefore for computing the amount of net sales we simply applied the above formula.