Customer returns and allowances for a shoe department came t

Customer returns and allowances for a shoe department came to $7,000. Gross sales in the department were $75,000. A) What percentage of merchandise sold was returned? B) What is the department’s Net Sales?

Solution

Given that :

        Customer returns and allowances = $7,000

               Gross sales       =    $75,000

A) percentage of merchandise sold was returned :

              =        Customer returns and allowances / Gross sales

               =        7,000/75,000

              =         9.33%

        percentage of merchandise sold was returned = 9.33%

   B)   departments net sales :

                      =   gross sales – returns and allowances

                      =   $75,000-$7,000

                      = $68,000

           Net sales = $68,000