Compute sales revenue and gross profit for hair world
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Problrm
Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
|
a. |
Sold merchandise for cash (cost of merchandise $14,797). |
$23,200 |
|
b. |
Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $150). |
250 |
|
c. |
Sold merchandise (costing $3,088) to a customer, on account with terms 2/10, n/30. |
6,500 |
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d. |
Collected half of the balance owed by the customer in (c) within the discount period. |
3,185 |
|
e. |
Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid |
104 |
1. Compute Sales Revenue, Net Sales, and Gross Profit for Hair World.
2. Compute the gross profit percentage. (Round your answer to 1 decimal place.)
3. Prepare journal entries to record transactions (a)-(e).
4. Hair World is considering a contract to sell merchandise to a hair salon chain for $11,500. This merchandise will cost Hair World $8,320. What would be the increase (or decrease) to Hair World's gross profit and gross profit percentage? (Round ""Gross Profit Percentage"" to 1 decimal place.)
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Rating:
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