Multiple Choice
If an employee earns a monthly gross salary of \$4,000 and has deductions totaling \$850, what is her new monthly net pay? Round your answer to the nearest dollar.
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4. Merchandising Operations
Net Sales
Multiple Choice
Which of the following transactions would typically result in an ordinary gain or loss when calculating net sales?
A
Sale of a company vehicle used for five years
B
Issuance of common stock above par value
C
Sale of inventory at a price different from its cost
D
Revaluation of land to fair market value
Verified step by step guidance1
Step 1: Understand the concept of ordinary gain or loss. Ordinary gains or losses typically arise from transactions that are part of a company's normal business operations, such as the sale of inventory. These are included in the calculation of net sales.
Step 2: Analyze the transaction 'Sale of a company vehicle used for five years.' This transaction is related to fixed assets and would result in a gain or loss classified as non-operating, not ordinary, because it is not part of the company's core business operations.
Step 3: Examine the transaction 'Issuance of common stock above par value.' This transaction is related to equity financing and does not result in a gain or loss. It is not part of the calculation of net sales.
Step 4: Evaluate the transaction 'Sale of inventory at a price different from its cost.' This transaction directly relates to the company's core business operations and would result in an ordinary gain or loss, as inventory sales are part of net sales calculations.
Step 5: Consider the transaction 'Revaluation of land to fair market value.' This transaction involves adjusting the value of an asset and does not result in a gain or loss that affects net sales. It is typically recorded in other comprehensive income or equity, depending on accounting standards.
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