1.2.

Profitability Analysis Erin Enterprises reports the following information on its year-end income statement: Net Sales $200,000 Operating Expenses $40,000 Cost of Goods Sold 110,000 Other Income 25,000 Required Calculate Erin's gross profit percentage and return on sales ratio. (Round answer to one decimal place.) 45 % Gross profit percentage = Return on sales ratio = 25 % x Journal Entries for Merchandise Transactions-Perpetual System Jane Distributing Company uses the perpetual inventory system. Jane had the following transactions related to merchandise during the month of August: Aug. 10 Purchased on account merchandise for resale for $9,000; terms were 2/10, n/30. 12 Paid $450 cash for freight on the August 10 purchase. 16 Returned merchandise costing $800 (part of the $9,000 purchase). 19 Paid for merchandise purchased on August 10. 22 Sold merchandise on account costing $8,500 for $11,000; terms were 2/10, n/30. 25 Customer returned merchandise costing $750 that had been sold on account for $900 (part of the $11,000 sale). 31 Received payment from customer for merchandise sold on August 22. Required Record each of the transactions related to purchaing and selling merchandise for the Jane Distributing Company. GENERAL JOURNAL Date Description Debit Credit Aug 10 $ 0 $ 0 0 0 Purchased merchandise with 2/10, n/30 terms. 12 0 0 0 0 Paid freight on August 10 purchase. 16 0 o o 0 Returned merchandise from August 10 purchase. 19 0 0 ooo Cash 0 Paid for merchandise purchased on August 10 within the discount period. 22 0 0 0 0 To record revenue from sale of merchandise. 22 0 0 . 0 0 To record cost of merchandise sold and to reduce inventory. 25 - 0 0 0 0 To record sales return by customer. 25 0 0 0 0 To record cost of goods returned by customers. 31 Cash ooo To record receipt of cash from customer within the discount period