Gross billings for merchandise sold by Lang Company to its customers last year amounted to $11,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Lang Company were
A) $11,720,000.
B) $11,350,000.
C) $11,175,000.
D) $11,035,000.

Question

Quizplus · Accepted Answer

Net sales are calculated by subtracting sales returns and allowances and sales discounts from gross billings. Freight-out is not deducted in this calculation. Therefore, net sales = $11,720,000 - $370,000 - $175,000 = $11,175,000.

Gross Billings for Merchandise Sold by Lang Company to Its