1.
False Value Hardware began 2013 with a credit balance of $31,200 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $620,000 and
$580,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013,
customers returned merchandise for credit of $25,000 to their accounts.
False Value Hardware began 2013 with a credit balance of $31,200 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $620,000 and
$580,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013,
customers returned merchandise for credit of $25,000 to their accounts.
False Value's 2013 income statement would report net sales of?
Solution
Solution:
Sales 620000
Sales return (7% * 620000) 43400
Net sales (Sales - sales return) 576600