The adjusted trial balance of Sunland Company shows these data pertaining to sales at the end of its fiscal year, October 31, 20
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Answer:
The amount that will be reported on the income statement as net sales is <u>$2,940</u> and as gross profit is <u>$940</u>.
Explanation:
Given:
Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60.
If the customer pays within the discount period.
Now, to find the amount reported on the income statement as net sales and as gross profit.
Cost of merchandise = $2,000.
As, merchandise sold for $3,000.
So, to get the net sales we deduct the discount:
Merchandise on terms 2/30, n/60.
<u><em>Thus, the net sales is $2,940</em></u>.
Now, to get the gross profit we subtract cost of merchandise from net sales:
<em><u>Hence, gross profit is $940.</u></em>
Therefore, the amount that will be reported on the income statement as net sales is $2,940 and as gross profit is $940.