False Value Hardware began 2011 with a credit balance of $32,000 in the allowance for sales returns account.

False Value Hardware began 2011 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During 2011, customers returned merchandise for credit of $28,000 to their accounts.False Value’s 2011 income statement would report net sales of:

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