Question
Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: |
a. | Sold merchandise for cash (cost of merchandise $14,797). | $23,200 |
b. | Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $150). | 250 |
c. | Sold merchandise (costing $3,088) to a customer, on account with terms 2/10, n/30. | 6,500 |
d. | Collected half of the balance owed by the customer in (c) within the discount period. | 3,185 |
e. | Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid | 104 |
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1.Compute Sales Revenue, Net Sales, and Gross Profit for Hair World.
2. Compute the gross profit percentage.(Round your answer to 1 decimal place.)
3. | Prepare journal entries to record transactions (a)(e). |
4. | Hair World is considering a contract to sell merchandise to a hair salon chain for $11,500. This merchandise will cost Hair World $8,320.What would be theincrease (or decrease) to Hair Worlds gross profit and gross profit percentage?(Round "Gross Profit Percentage" to 1 decimal place.) |
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