DISCOUNT RECEIVED

Sasha has prepared a draft statement of profit or loss for her business as follows: Sales 256,800 Cost of sales Opening inventory 13,400 Purchases 145,000 Closing inventory (14,200 (144,200) Gross profit 112,600 Expenses (76,000) Net profit 36,600 Sasha has not yet recorded the following items: ? Carriage in of $2,300 ? Discounts received of $3,900 ? Carriage out of $1,950 After these amounts are recorded, what are the revised values for gross and net profit of Sasha’s business? HOW IS DISCOUNT RECEIVED TREATED? in the study text it said discount received should be netted off against purchase to reduce COS but in the solution of this question they not reduced from the COS instead they have subtracted from after the gross profit part so how should you account for discount received should be subtracted from cos or after the gp?