Use the data in P 7 for this problem.

Required 1. Prepare entries in journal form (refer to the review problem) to record the transactions, assuming use of the periodic inventory system.

2. User Insight: In their published financial statements most companies call the first line on their income statement “net sales.” Other companies simply say “sales.” Do you think these terms are equivalent and comparable?

What would be the content of “net sales”? What might be the reason a company would use “sales” instead of “net sales”?