E6-8 Evaluating the Effects of Sales Returns and Allowances on Sales LO6-2 Teen World Inc. sells a wide selection of clothing items for teenage girls. The company imports merchandise from various international suppliers and distributes its merchandise to retail stores in major shopping areas. The company sells merchandise on credit, allows retailers to return incorrect or damaged merchandise within a period of two months, and grants sales allowances under certain circumstances. The company is currently reviewing its sales returns policy and provided you with the following information for the past six quarters: 1,486,000 1,596,000 Quarter Jan. 1-March 31, 2020 April 1-June 30, 2020 July 1-Sept. 30, 2020 Gross Sales Cost of Sales Sales Returns and Allowances $152,240 $1,384,000 $ 949,000 952,700 133,740 1,045,000 111,720 Oct. 1-Dec. 31, 2020 1,746,000 1,123,000 122,220 Jan. 1-March 31, 2021 1,793,000 989,000 143,440 April 1-June 30, 2021 2,342,000 1,350,000 117,100 Required: 1. Compute the following ratios for each of the six quarters: (a) cost of sales to net sales and (b) sales returns and allowances to gross sales. (Round the final answers to the nearest whole percent.) Ratio Quarter Cost of Sales to Net Sales Sales Return and Allowances to Gross Sales 1st quarter, 2020 % % 2nd quarter, 2020 % % 3rd quarter, 2020 % % 4th quarter, 2020 % % 1st quarter, 2021 % % 2nd quarter, 2021 % %