Answer to Question #249760 in Accounting for Another you

Question

A. Fill-Health Merchandising is engaged in selling pharmaceutical drugs including personal protective equipment face shields and facemasks. In 2020, it bought 3 million worth of items to be sold to Gramago Enterprises. Fill-Health paid its supplier 2.3 million in cash and the rest was placed on account. For the year ended, 2020, it made cash and credit sales of 800,000 and 400,000 respectively. However, it provided 20,000 discount bulk buyers and there was a 350,000 customers' return of defective facemasks and expired faceshields.
1. How will you compute for Fill-Health's total and net sales? How much then is its net sales?

Answer 1

Total sales = Cash sales + Credit sales

                    = 800,000+400,000

                    = 1,200,000

Net Sales = Total Sales- Sales Returns – Discount allowed

                  = 1,200,000-350,000-20,000

                  =830,000