Question

Gross billings for merchandise sold by Sandhill Co. to its customers last year amounted to $12720000; sales returns and allowances were $371000, sales discounts were $175500, and freight-out was $139200. Net sales last year for Sandhill Co. werea. $12,720,000.
b. $12,275,000.
c. $12,175,000.
d. None of the above.

Answer 1

Answer: The net sale is $12,034,300

Therefore the correct option is option D. Non of the above.

Explanation: Net sales is the value of sales when sales return and allowance, sales discount, and expenses due to sales, are subtracted from the gross sales. This is very important as it tells the quality of sales made.

Freight out is the expenses incurred in transportation, during delivering of goods.

NET SALES IS CALCULATED AS:

$12,720,000 - ($371,000 + $175,500 + $139,200) =

$12,720,000 - $685,700 = $12,034,300

Therefore the net sale is $12,7034,300