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.