Question

A company reports the following sales-related information. Compute and prepare the net sales portion only of this company’s multiple-step income statement.

Sales gross	\(200,000	Sales return and allowances	\)16,000
Sales discount	4,000	Sales salaries expenses	10,000

Short answer

Answer

The net sales of the business entity amount to$180,000.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of Income Statement

The statement prepared by the accountant representing the net benefits generated by the business entity by reporting the expenses and the revenue of the business is known as the income statement.

Calculation of net sales

Particulars	Amount $
Gross sales	$200,000
Less: Sales discount	(4,000)
Less: Sales return and allowance	(16,000)
Net sales	$180,000