What entry would you make on an income statement for NET SALES for the year ended December 31, 2011? Gross Sales, $200,000; Sales Returns and Allowances, $5,800; Sales Discounts, $5,700; Merchandise Inventory, January 1, 2011, $67,100; Merchandise Inventory, December 31, 2011, $51,900; Net Purchases, $89,200; Freight In, $700; Salaries, $81,800; Rent, $18,600; Utilities, $1,125; Insurance, $2,175; and Income Tax, $14,900.
A) $105,100
B) $118,600
C) $157,000
D) $188,500

Question

Quizplus · Accepted Answer

Net Sales are calculated by subtracting Sales Returns and Allowances and Sales Discounts from Gross Sales. Therefore, Net Sales = $200,000 - $5,800 - $5,700 = $188,500.

What Entry Would You Make on an Income Statement for NET