Calculate Net Sales from Financial Information
What is the amount of net sales on the income statement?
Based on the financial information provided, the net sales on the income statement can be calculated by subtracting the sales returns and allowances and sales discounts from the sales revenue. Therefore, the net sales would be:
Net Sales = Sales Revenue - (Sales Returns and Allowances + Sales Discounts)
Answer:
The amount of net sales on the income statement is $125,000.
Financial information is presented below:
- Operating expenses: $56,000
- Sales returns and allowances: $11,000
- Sales discounts: $6,000
- Sales revenue: $142,000
- Cost of goods sold: $103,000
The net sales figure represents the total amount of revenue earned from the sale of goods or services after deducting any returns, allowances, and discounts. In this case, the company's net sales amount on the income statement is $125,000, which reflects the true amount of sales revenue earned after deducting sales returns, allowances, and discounts. This figure is crucial for calculating ratios like gross profit margin and net profit margin.