Using the following data, compute net sales
sales discounts 50,000
Accounts receivable, ending 125,000 Gross Sales 2,500,000
Inventory, ending 200,000
sales returns and allowances 75,000
To compute net sales, you need to subtract the following items from gross sales:
1. Sales Discounts: The sales discounts are given as $50,000. This represents the discounts offered to customers on sales. So, you need to subtract $50,000 from gross sales.
2. Sales Returns and Allowances: The sales returns and allowances are given as $75,000. This represents returns or allowances made to customers for sales made during the period. So, you also need to subtract $75,000 from gross sales.
Now let's calculate net sales using the given data:
Gross Sales: $2,500,000
Sales Discounts: $50,000
Sales Returns and Allowances: $75,000
Net Sales = Gross Sales - Sales Discounts - Sales Returns and Allowances
Net Sales = $2,500,000 - $50,000 - $75,000
Net Sales = $2,375,000
Therefore, the net sales for the given data is $2,375,000.