Heller Company offers an unconditional return policy to its customers. During the current period, the company records total sales of $850,000, with a cost of merchandise to Heller of $340,000. Based on past experience, Heller Company expects 4% of sales to be returned.
How much in net sales will Heller Company recognize for the current period?

Question

Quizplus · Accepted Answer

Heller Company will recognize net sales of $816,000 after accounting for the expected returns. This is calculated by subtracting the expected returns ($850,000 * 4% = $34,000) from the total sales ($850,000 - $34,000 = $816,000).

Heller Company Offers an Unconditional Return Policy to Its Customers