A company reported the following amounts at the end of the year: total sales revenue = $500,000; sales discounts = $10,000; sales allowances = $15,000; net revenues = $440,000. What amount did the company report for sales returns for the year? $475,000. $25,000. $35,000. $415,000.

Question

Business

Byron Webster

13 January, 05:25

A company reported the following amounts at the end of the year: total sales revenue = $500,000; sales discounts = $10,000; sales allowances = $15,000; net revenues = $440,000. What amount did the company report for sales returns for the year? $475,000. $25,000. $35,000. $415,000.

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Answers (1)

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Neil Le · Answer 1

The correct answer is $475,000

Explanation:

The question is asking for us to find sales return, which is the net amount recorded on sales of a product, after the expenses incurred during sales have been deducted. To calculate this, we will subtract the total expenses associated with sales from the total sales. This is shown as follows;

Sales revenue = $500,000

Sales discount = $10,000

Sales allowances = $15,000

Sales return = Sales revenue - (sales discount + sales allowance)

= 500,000 - (10,000 + 15,000) = 500,000 - 15,000 = $475,000

Note that we ignore net revenues because it is not relevant in calculating the sales return, it was in fact calculated using the data from the sales return.