Explanation:
Sales Discount = (Gross Sales - Sold Price) × Discount percentage
($39,900 - $1,520) × 2%
Net sales = Gross Sales - Sales Returns - Sales Discounts
= $39,900 - $1,520 - $767.60
= $37,612.40
Ozark Merchandisers Income Statement
Net Sales Revenue $37,612.40
Cost of Goods Sold ($21,200 - $920) $20,280
Gross Profit $17,332.40
Selling and Administrative Expenses $4,200
Income from Operations $13,132.40
Other Income
Gain on sale of land $1,250
Interest Expense ($360) $890
Net Income $14,022.40
Under Finance activities the interest expense is $360 in the statement of cash flow.
