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 $18,797) $31,200 b Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $210) 350 c Sold merchandise (costing $3,563) to a customer, on account with terms 2 10, n 30 7,500 d Collected half of the balance owed by the customer in ( c ) within the discount period 3,675 e Granted a partial allowance relating to credit sales that the customer in ( c ) had not yet paid 120 1a) 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 ) 1b) Hair World is considering a contract to sell merchandise to a hair salon chain for $12,500 This merchandise will cost Hair World $8,800 What would be the increase (or decrease) to Hair Worlds gross profit and gross profit percentage (Round Gross Profit Percentage to 1 decimal place )

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Posted on Aug 28, 2024

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 $18,797).	$31,200
b.	Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $210).	350
c.	Sold merchandise (costing $3,563) to a customer, on account with terms 2/10, n/30.	7,500
d.	Collected half of the balance owed by the customer in (c) within the discount period.	3,675
e.	Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid	120

1a) 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.)

1b) Hair World is considering a contract to sell merchandise to a hair salon chain for $12,500. This merchandise will cost Hair World $8,800. What would be the increase (or decrease) to Hair Worlds gross profit and gross profit percentage? (Round "Gross Profit Percentage" to 1 decimal place.)