Hair supplies. Hair World uses a Hair World Inc. is a wholesaler of perpetual inventory system. The following transactions (summarized) have been selected for analysis:

Required:

1. Compute Net Sales and Gross Profit for Hair World. No additional sales returns/allowances are expected.
2. Compute the gross profit percentage (using the formula shown in this chapter and rounding to one 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 $15,000. This merchandise will cost Hair World $10,000. Would this contract increase (or decrease) Hair World’s dollars of gross profit and its gross profit percentage?

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$51,200 Sold merchandise for cash (cost of merchandise $28,797). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $360). c. a. Sold merchandise (costing $4,750) to a customer on account with terms n/60. d. Collected half of the balance owed by the customer in (c). 600 10,000 5,000 Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. e. 160