Net Sales

Net sales is calculated by subtracting sales returns and allowances and sales discounts from sales. Suppose Music Suppliers, Inc., sells merchandise worth $116,500 during June and, in conjunction with these sales, handles $9,300 in returns and allowances and $1,200 in sales discounts. The company's net sales for June equal $106,000.

Music Suppliers, Inc. Calculation of Net Sales For the Month Ended June 30, 20X3

Sales

$116,500

Less: Sales Returns and Allowances

$9,300

      Sales Discounts

1,200

10,500

Net Sales

$106,000