QUESTION $1$

Brimmes Company sells office supplies. The company has a stated return policy of $10$ days from

the date of sale. Management estimates that returns will be $10\%$ of sales. Record the following

transactions for Brimmes Company:

Sept. $4$ Sold merchandise for $$1,750$ on account to Alverstone Company, terms, n$/30,$ FOB

destination. The original cost of the merchandise to Brimmes Company was $$700.$

$5$ The correct company pays freight charges of $$50.$

$8$ Alverstone returned goods with a selling price of $$175$ and a cost of $$70.$ The

goods are restored to inventory.

$14$ Received the correct payment from Alverstone Company.

$16$ Brimmes has a clearance sale and sells $$500$ of goods to Lincoln Liquidators, FOB

shipping point. Brimmes specifies that no returns will be allowed for this sale, but

offers Lincoln terms of $\frac{1}{15},\frac{n}{30}.$ The goods cost Brimmes $$425.$

$17$ The correct company pays freight charges of $$30.$

$30$ Received the correct payment from Lincoln Liquidators.

QUESTION $2$

The following transactions occurred in August:

Aug. $1$ Superior Seating Company buys merchandise on account from Cotton Company

for $$1,000,$ terms $\frac{2}{10},\frac{n}{30},$ FOB destination.

$1$ The correct company pays freight charges of $$70.$

$3$ Superior Seating Company returns $$150$ of the merchandise to Cotton Company

and the goods are returned to inventory.

$10$ Superior Seating Company pays the total amount owing.

Both companies use a periodic inventory system.

a$.$ Record Superior Seating Company's transactions.

b$.$ Record Cotton Company's transactions.

QUESTION $3$

Selected financial information is available for two recent fiscal years for Antonia Co$.$

a$.$ Calculate $(1)$ gross profit, $(2)$ gross profit margin, and $(3)$ profit margin for $2021$ and $2020.$

b$.$ Comment on any changes in profitability.