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Multiple Choice
Which of the following best describes how net sales are calculated if a company sells a property for \$32,000, offers \$2,000 in sales discounts, and has \$1,000 in sales returns?
A
\$32,000
B
\$31,000
C
\$29,000
D
\$30,000
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Verified step by step guidance
1
Step 1: Understand the concept of net sales. Net sales are calculated by subtracting sales discounts and sales returns from the gross sales amount.
Step 2: Identify the gross sales amount from the problem. In this case, the company sells a property for \$32,000, which represents the gross sales.
Step 3: Determine the sales discounts offered. The problem states that the company offers \$2,000 in sales discounts.
Step 4: Determine the sales returns. The problem states that there are \$1,000 in sales returns.
Step 5: Apply the formula for net sales: Net Sales = Gross Sales - Sales Discounts - Sales Returns. Substitute the values: Net Sales = \$32,000 - \$2,000 - \$1,000.