Question

a company reports sales returns and allowances of $86,000 and net sales of $700,000. it also reports cost of goods sold of $370,000. find the company’s sales and gross profit.

Answer 1

If a company reports sales returns and allowances of $86,000 and net sales of $700,000. it also reports cost of goods sold of $370,000. The company’s sales and gross profit will be:

• Sales $786,000

• Gross Profit $330,000

a) Calculation for the company sales:

Using this formula

Sales=Sales return+ Net sales

Let plug in the formula

Sales=$86,000+$700,000

Sales=$786,000

b) Calculation for the company gross profit:

Using this formula

Gross profit=Net sales-Cost of goods sold

Let plug in the formula

Gross profit=$700,000-$370,000

Gross profit=$330,000

Inconclusion if a company reports sales returns and allowances of $86,000 and net sales of $700,000. it also reports cost of goods sold of $370,000. The company’s sales and gross profit will be:

• Sales $786,000

• Gross Profit $330,000

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