Cycle Wholesaling sold merchandise on account, with terms n/60, to Sarahs Cycles on February 1 for $350 (cost of goods sold of $280). On February 9, Sarahs Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $70). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale.

Required: 1. to 3. Prepare the journal entries to record the sale

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