Question
Hair Care Inc. is a wholesaler of hair supplies. Hair Care uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
Hair Care Inc. is a wholesaler of hair supplies. Hair Care uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
a. | Sold merchandise for cash (cost of merchandise $29,197) | $ | 51,600 | |
b. | Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $400) | 640 | ||
c. | Sold merchandise (costing $4,950) to a customer, on account with terms 3/10, n/30 | 10,000 | ||
d. | Collected half of the balance owed by the customer in (c) within the discount period | 4,850 | ||
e. | Granted an allowance to the customer in (c) | 180 | ||
1. Compute Sales Revenue, Net Sales, and Gross Profit for Hair World.
3. Prepare journal entries to record transactions (a)(e). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
4. Hair Care is considering a contract to sell merchandise to a hair salon chain for $15,400. This merchandise will cost Hair Care $10,000. (a) Compute the new gross profit percentage. (
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