Campus Co-Op, which is operated by students, uses a perpetual inventory system. The following transactions (summarized) have been selected from 2014:

1. Compute Sales Revenue, Net Sales, and Gross Profit for Campus Co-Op.
2. Compute the gross profit percentage (using the formula shown in this chapter).
3. Prepare journal entries to record transactions (a) through (e).
4. Campus Co-Op is considering a contract to sell merchandise to a campus organization for $15,000. This merchandise will cost Campus Co-Op $12,000. Would this contract increase (or decrease) Campus Co-Op's gross profit and gross profit percentage? How should Campus Co-Op decide whether to accept the contract?
The impact on gross profit (a dollar amount) may differ from the impact on gross profit percentage.

Transcribed Image Text:

Sold merchandise for cash (cost of merchandise, $152,070). b. a. $275,000 Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise, $800). Sold merchandise (costing $9,000) to a customer, on account with terms 2/10, n/30. 1,600 20,000 C. Collected half of the balance owed by the customer in (c) within the discount period. Granted an allowance to the customer in (c). d. 1,800 e.