Homework SourseGrappa Inc reported the following information for 2017 and 2
Grappa, Inc. reported the following information for 2017 and 2016:
How much is net sales for 2017?
$
What other components that Grappa did not report could be included in this computation?
| 2017 | 2016 | ||
| Sales | $951,200 | $890,000 | |
| Sales discounts | 12,000 | 23,000 | |
| Purchases | 580,000 | 600,000 | |
| Inventory, December 31 | 46,000 | 40,000 | |
| Transportation-in | 18,000 | 19,000 | |
| Purchase discounts | 4,000 | 5,000 |
Solution
Net sales = sales less sales discounts = 951,200 - 12,000 = 939,200
Other components that can be included:
Sales allowances: sales allowances reduces net sales. they are basically given to satisfy customers who were sold inferior goods.
Sales returns: sales returns reduces net sales. They are goods sold and returned by the customers at a later point of time.
