False Value Hardware began 2013 with a credit balance of $31,200 in the allowance for sales returns account. Sales and cash collections from customers during the year were $620,000 and $580,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013, customers returned merchandise for credit of $25,000 to their accounts. Solution net sales = 620000 - (620000 * 0.07) = 576600 .

1. False Value Hardware began 2013 with a credit balance of $31,200 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $620,000 and
$580,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013,
customers returned merchandise for credit of $25,000 to their accounts.
False Value Hardware began 2013 with a credit balance of $31,200 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $620,000 and
$580,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013,
customers returned merchandise for credit of $25,000 to their accounts.
False Value's 2013 income statement would report net sales of?
Solution
net sales
= 620000 - (620000 * 0.07)
= 576600