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3 August, 20:10

The following information was drawn from the 2016 accounting records of Ozark Merchandisers: 1. Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30. 2. Customers returned merchandise to Ozark five days after the purchase. The merchandise had been sold for a price of $1,520. The merchandise had cost Ozark $920. 3. All customers paid their accounts within the discount period. 4. Selling and administrative expenses amounted to $4,200. 5. Interest expense paid amounted to $360. 6. Land that had cost $8,000 was sold for $9,250 cash. Determine the amount of net sales Prepare a multistep income statement. Where would the interest expense be shown on the statement of cash flows? a. Operating activitiesb. Investing activitiesc. Financing activities

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  1. 3 August, 20:33
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    Sales Discount = (Gross Sales - Sold Price) * Discount percentage

    ($39,900 - $1,520) * 2%

    Net sales = Gross Sales - Sales Returns - Sales Discounts

    = $39,900 - $1,520 - $767.60

    = $37,612.40

    Ozark Merchandisers Income Statement

    Net Sales Revenue $37,612.40

    Cost of Goods Sold ($21,200 - $920) $20,280

    Gross Profit $17,332.40

    Selling and Administrative Expenses $4,200

    Income from Operations $13,132.40

    Other Income

    Gain on sale of land $1,250

    Interest Expense ($360) $890

    Net Income $14,022.40

    Under Finance activities the interest expense is $360 in the statement of cash flow.
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