Merchandise costing $2,100 is sold for $3,100 on terms 1/10, n/30. If the buyer pays within the...
Question:
Merchandise costing $2,100 is sold for $3,100 on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales and as gross profit?
| Net Sales ? | _____ |
| Gross Profit ? | _____ |
Income Statement:
Income statements report revenues and expenses affecting a company over a specified period of time. Net income on the income statement must reconcile to the net income on the balance sheet as of the same date.
Answer and Explanation: 1
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View this answer| Net Sales | $3,069 |
| Gross Profit | $969 |
Net Sales was calculated by subtracting gross sales of $3,100 minus the discount of $31 ($3,100 x 0.01).
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Operations of an Income Statement
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Chapter 8 / Lesson 5
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An income statement demonstrates the company's income and expenses over a given timeframe, used to reflect performance. Learn the operations of income statements in multi vs single-steps and the details of the line items they use.
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