Question

Kelly’s Jewelry has the following transactions during the year: total jewelry sales = $640,000; sales discounts = $14,500; sales returns = $39,000; sales allowances = $19,000. In addition, at the end of the year the company estimates the following transactions associated with jewelry sales in the current year will occur next year: sales discounts = $1,450; sales returns = $4,680; sales allowances = $2,530. Compute net sales.

Answer 1

To compute the net sales for Kelly's Jewelry, subtract the sum of sales discounts, sales returns, and sales allowances from the total jewelry sales, including estimated future figures. The net sales are calculated as $640,000 minus $81,160, which equals $558,840.

Step-by-step explanation:

Calculating net sales involves taking the total sales and subtracting sales discounts, sales returns, and sales allowances. Kelly's Jewelry has a calculation for the net sales which can be done as follows:

To calculate the net sales, we use the following equation:

Net sales = Total jewelry sales - (Sales discounts + Sales returns + Sales allowances) - (Estimated future sales discounts + Estimated future sales returns + Estimated future sales allowances).

Substituting the numbers:

Net sales = $640,000 - ($14,500 + $39,000 + $19,000) - ($1,450 + $4,680 + $2,530).

Calculation:

Net sales = $640,000 - $72,500 - $8,660.

Net sales = $640,000 - $81,160.

Net sales = $558,840.

Therefore, the net sales for Kelly's Jewelry for the year is $558,840.

Answer 2

$559,020

Step-by-step explanation:

The computation of net sales is shown below:-

Total sales = $640,000

Sales discount = $14,500 + $1,450

= $15,950

Sales return = $39,000 + $4,680

= $43,680

Sales allowance = $19,000 + $2,530

= $21,350

So,

Net sales = Total sales - Sales discount - Sales return - Sales allowance

= $640,000 - $15,950 - $43,680 - $21,350

= $559,020

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