Problrm
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:
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a.
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Sold merchandise for cash (cost of merchandise $14,797).
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$23,200
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b.
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Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $150).
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250
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c.
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Sold merchandise (costing $3,088) to a customer, on account with terms 2/10, n/30.
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6,500
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d.
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Collected half of the balance owed by the customer in (c) within the discount period.
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3,185
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e.
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Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid
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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 the increase (or decrease) to Hair World's gross profit and gross profit percentage? (Round "Gross Profit Percentage" to 1 decimal place.)