If a company reports sales returns and allowances of $86,000 and net sales of $700,000. it also reports cost of goods sold of $370,000. The company’s sales and gross profit will be:
a) Calculation for the company sales:
Using this formula
Sales=Sales return+ Net sales
Let plug in the formula
Sales=$86,000+$700,000
Sales=$786,000
b) Calculation for the company gross profit:
Using this formula
Gross profit=Net sales-Cost of goods sold
Let plug in the formula
Gross profit=$700,000-$370,000
Gross profit=$330,000
Inconclusion if a company reports sales returns and allowances of $86,000 and net sales of $700,000. it also reports cost of goods sold of $370,000. The company’s sales and gross profit will be:
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