CP$6-3($Algo$)$ Recording Cash Sales, Credit Sales, Estimated and Actual Sales Returns, and Sales

Allowances, and Analyzing Gross Profit Percentage $[$LO $6-4,$ LO $6-6]$

$[$The following information applies to the questions displayed below.$]$

Handy Howard's Incorporated, is a student co$-$op$.$ Handy Howard uses a perpetual inventory system. The following

transactions $($summarized$)$ have been selected for analysis:

a$.$ Sold merchandise for cash $($cost of merchandise $$154,870).$

b$.$ Received merchandise returned by customers as unsatisfactory $($but in perfect condition$)$ for cash

refund $($original cost of merchandise $$608).$

$c.$ Sold merchandise $(costing$ $$9,180)to$ a customer $on$ account with terms$\frac{n}{30},20,400$

$d.$ Collected half $of$ the balance owed $by$ the cuse $10,200$

$d.$ Collected half $of$ the balance owed $by$ the customer $in(c).$

$e.$ Granted a partial allowance relating $to$ credit sales the customer $in(c)$ had not yet paid. $1,140$

f$.$ Anticipate further returns of merchandise $($costing $$204)$ after month$-$end from sales made during

the month.

CP$6-3($Algo$)$ Part $4$

Handy Howard is considering a contract to sell merchandise to a Handy Howard organization for $$15,400.$ This merchandise will

cost Handy Howard $$12,320.$ Would this contract increase $($or decrease$)$ Handy Howard dollars of gross profit and its gross profit

percentage? TIP: The impact on gross profit dollars may differ from the impact on gross profit percentage. $($Round "Gross Profit

Percentage" to $1$ decimal place.$)$