Cycle Wholesaling sold merchandise on account, with terms n/60, to Sarahs Cycles on February 1 for $1,100 (cost of goods sold of $650). On February 9, Sarahs Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $170). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale.

Required:

1. 1. to 3. Prepare the journal entry to record the sales, Goods returned on February 9 and Cash collected on March 2.

2. Record the Sales made by Cycle Wholesaling on account, with terms n/60, to Sarahs Cycles on February 1 for $1,100.

3. Record the Cost of Goods sold by Cycle Wholesaling on account, with terms n/60, to Sarahs Cycles at $650.

4. Record the Goods returned by Sarahs Cycles on February 9 at $275.

5. Record the Cost of Goods returned by Sarahs Cycles at $170.

6. Record the receipt of cash from Sarah's Cycles at $825.

7. 4. Calculate the gross profit percentage for the sale to Sarahs Cycles.