Newark Company has provided the following information:
How much are Newark's net sales?
The Net Sales is Computed by adding Gross Sales i.e Cash Sales plus Credit Sales reduced by Sales Discount, Rebates & Allowances.
Gross Sales = Cash sales + Credit sales = $540,000 + $1,440,000 = $19,80,000
Therefore, Net Sales = Gross Sales - Sales discounts - Sales returns and allowances
= $19,80,000 - $52,000 - $99,000
Answer: The Net Sales is : $18,29,000
[Note: Selling and administrative expenses,Increase in accounts receivable, Bad debt expense has no relevance in determining Net Sales]
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