Herald company had sales of $137,000, sales discounts of $2,050, and sales returns of $3,290. Herald company's net sales equals
135000 - 2000 - 3200 = $129800
The total of a company's net sales is its gross sales less any returns, allowances, and discounts. Externally, net sales calculations are not always obvious. They can often be considered into the reporting of top line revenues reported on the income statement.
Companies can not be very open with the public about their net sales. Because of the various factors that go into its calculation, net sales could not apply to every business and industry. Gross revenue less any relevant sales returns, allowances, and discounts results in net sales.
Gross profit and gross profit margin will be impacted by costs related to net sales, however net sales do not take into account cost of goods sold, which is typically the main factor influencing gross profit margins.
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