### Sales-Related InformationA company reports the following sales-related information.- **Sales, gross:** $270,000- **Sales returns and allowances:** $17,000- **Sales discounts:** $5,400- **Sales salaries expense:** $11,400### Net Sales Portion of Multiple-Step Income StatementTo prepare the net sales portion of this company's multiple-step income statement, we need to calculate the net sales by following these steps:1. **Start with gross sales.**2. **Subtract sales returns and allowances.**3. **Subtract sales discounts.**#### Graph/Diagram ExplanationThe diagram provided shows a partial layout of a Multiple-Step Income Statement, focusing on the net sales section. It consists of several rows and columns which indicate specific entries that need to be filled out for calculating net sales.#### Calculation Steps1. **Gross Sales** - Begin with the gross sales amount of $270,000.2. **Subtract Sales Returns and Allowances** - Subtract the sales returns and allowances amount of $17,000 from the gross sales.3. **Subtract Sales Discounts** - Subtract the sales discounts amount of $5,400 from the result obtained after subtracting the sales returns and allowances.The box (cell) layout in the diagram represents each step visually:- The first row displays the gross sales.- The subsequent rows likely represent the deductions (returns, allowances, and discounts).- The final row shows the calculated net sales.By using the provided numbers, we can arrange them into the income statement to get the net sales:**Net Sales Calculation:**\[\text{Gross Sales} = \$270,000 \\\text{Less: Sales Returns and Allowances} = \$17,000 \\\text{Less: Sales Discounts} = \$5,400 \\\]\[\text{Net Sales} = \$270,000 - \$17,000 - \$5,400 \\\text{Net Sales} = \$247,600\]These numbers need to be entered in the corresponding cells in the Multiple-Step Income Statement diagram for accurate financial reporting. Note that sales salaries expense is not included in the net sales portion of the statement, as it generally appears under operating expenses.

Sales revenue: sales revenue is the revenue earned by the company through sales Gross sales: Gross…

Answered: Prepare the net sales portion only of…

Business

Accounting

Prepare the net sales portion only of this company's multiple-step income statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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