Merchandise costing $1,500 is sold for $2,500 on terms 1/30, n/60. If the customer pays within the discount period, what amount will be reported on the income statement as net sales and as gross profit?

The net sales is $2475 and the gross sales is $975.

Step-by-step explanation:

Since we have given that

Cost price = $1,500

Selling price = $2,500

Term 1/30 means buyer pays within 30 days of the date of sale, 1% discount will be allowed.

n/60 means the payment is not paid within 60 days and the full payment is made.

Amount of discount would be

So, Net sales = Sales - discount

Net sales =

and Gross sales = Net sales - Cost

Gross sales =

Hence, the net sales is $2475 and the gross sales is $975.