Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Larrys Building Supplies (LBS) is a local hardware store. LBS uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a.
Larrys Building Supplies (LBS) is a local hardware store. LBS uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
a. | Sold merchandise for cash (cost of merchandise $345,350). | $ | 725,000 | |
b. | Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $4,900). | 7,500 | ||
c. | Sold merchandise (costing $10,200) to a customer on account with terms n/30. | 17,000 | ||
d. | Collected half of the balance owed by the customer in (c). | 8,500 | ||
e. | Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. |
- Compute Net Sales and Gross Profit for LBS.
Net Sales: Gross Profit:
Larrys Building Supplies (LBS) is a local hardware store. LBS uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
a. | Sold merchandise for cash (cost of merchandise $345,350). | $ | 725,000 | |
b. | Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $4,900). | 7,500 | ||
c. | Sold merchandise (costing $10,200) to a customer on account with terms n/30. | 17,000 | ||
d. | Collected half of the balance owed by the customer in (c). | 8,500 | ||
e. | Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. | 2,450 | ||
- Record the cash sales of $725,000.
- Record the cost of goods sold of $345,350.
- Record the return by a customer of unsatisfactory merchandise that was in perfect condition. A cash refund of $7,500 was given to the customer.
- Record the merchandise returned by the customer back into inventory. The original cost of the merchandise was $4,900.
- Record the sales on account of $17,000 on terms n/30.
- Record the cost of goods sold of $10,200.
- Record the collection of half of the balance of $8,500 owed by the customer within the discount period.
- Record the allowance of $2,450 granted to the customer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started