False Value Hardware began in 2011 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. In 2011, customers returned merchandise for a credit of $28,000 to their accounts. False Value's 2011 income statement would report net sales of: a. $611,000 b. $607,000 c. $646,000 d. $622,000

False Value Hardware began in 2011 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. In 2011, customers returned merchandise for a credit of $28,000 to their accounts. False Value's 2011 income statement would report net sales of: a. $611,000 b. $607,000 c. $646,000 d. $622,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 27BEB: Last year, Tobys Hats had net sales of 45,000,000 and cost of goods sold of 29,000,000. Tobys had...

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A Head Office sends goods to its branch at cost plus 10%. On other sales the Head Office makes a uniform profit of 33⅓%. The Branch sells goods at a uniform profit of 25%. Following transactions took place during the year ended 31st March, 2015: (I) Head Office purchases amounted to $ 7,32,000 and purchase returns were $ 30,825 and discounts allowed by suppliers amounted to $ 15,045. (II) Sales by Head Office amounted to $ 5,40,000. Goods sent by Head Office to Branch at invoice price amounted to $ 2,72,250. Discounts allowed to customers were $ 4,950. (III) Goods sent to Branch on 31st March, 2015 amounting to $ 33,000 were in transit. (IV) Goods purchased by the Branch locally were of $ 91,312. (V) Establishment and other expenses at Head Office were of $ 1,40,130 and at the Branch of $ 40,238. (VI) Sales by the Branch amounted to $ 3,60,000; discount allowed to customers was $ 2,820…