Find the missing values in the income statement. What are the net sales?
| Income Statement |
| :--------------------------------------: |
| Sales | $78,000 |
| Returns | $(1,500) |
| Net Sales | $[?]$ |
| COGS | $(19,800) |
| Gross Profit | $ |
| Overhead | $(12,000) |
| Net Income | $ |
Answer (1)
Calculate Net Sales by subtracting Returns from Sales: N e tS a l es = S a l es − R e t u r n s .
Substitute the given values: N e tS a l es = $78 , 000 − $1 , 500 .
Calculate the Net Sales: N e tS a l es = $76 , 500 .
The net sales is $76 , 500 .
Explanation
Understanding the Problem We are given an income statement with the sales and returns. We need to find the net sales. The net sales is calculated by subtracting the returns from the sales.
Calculating Net Sales To find the net sales, we subtract the returns from the sales: N e tS a l es = S a l es − R e t u r n s N e tS a l es = $78 , 000 − $1 , 500 N e tS a l es = $76 , 500
Final Answer Therefore, the net sales is $76 , 500 .
Examples
Understanding income statements is crucial for businesses to assess their financial performance. For example, if a small retail store has sales of $100,000 and returns of $5,000, the net sales would be $95,000. This figure is then used to calculate gross profit by subtracting the cost of goods sold. Analyzing these figures helps the store owner make informed decisions about pricing, inventory, and overall business strategy.
