Mueller Company sold merchandise costing $120,000 for $240,000. Mueller estimates that merchandise costing $5,000 will be returned for a refund of $10,000. Mueller should report net sales of:

The answer is $230,000

Explanation:

Net sales is the sum of a company's gross (total) sales minus any returned goods, sales allowances and/or discounts. The total amount of revenue on a company's income statement is the net sales.

Gross sales - $240,000

Merchandise returned - $10,000

Net sales = Gross sales - goods returned

$240,000 - $10,000

= $230,000