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 $8,797). $11,200 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $60). 100 c. Sold merchandise (costing $2,375) to a customer, on account with terms 2/10, n/30. 5,000 d. Collected half of the balance owed by the customer in (c) within the discount period. 2,450 e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid 80
1.
Compute Sales Revenue, Net Sales, and Gross Profit for Hair World.
2.
Compute the gross profit percentage.
3. Prepare journal entries to record transactions (a)â(e). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
4.
Hair World is considering a contract to sell merchandise to a hair salon chain for $10,000. This merchandise will cost Hair World $7,600. What would be the increase (or decrease) to Hair Worldâs gross profit and gross profit percentage?
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 $8,797). $11,200 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $60). 100 c. Sold merchandise (costing $2,375) to a customer, on account with terms 2/10, n/30. 5,000 d. Collected half of the balance owed by the customer in (c) within the discount period. 2,450 e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid 80
1.
| Compute Sales Revenue, Net Sales, and Gross Profit for Hair World. 2.
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Related questions
Nicole's Getaway Spa (NGS) has been so successful that Nicolehas decided to expand her spa by selling merchandise. She sellsthings such as nail polish, at-home spa kits, cosmetics, andaromatherapy items. Nicole uses a perpetual inventory system and isstarting to realize all of the work that is created when inventoryis involved in a business. The following transactions were selectedfrom among those completed by NGS in August. |
| Aug. 2 | Sold 10 items of merchandise to Salon World on account at aselling price of $2,000 (total); terms 2/10, n/30. The goods costNGS $1,300. |
| Aug. 3 | Sold 5 identical items of merchandise to Cosmetics R Us onaccount at a selling price of $1,100 (total); terms 2/10, n/30. Thegoods cost NGS $825. |
| Aug. 6 | Cosmetics R Us returned one of the items purchased on August 3.The item could still be sold by NGS in the future, and credit wasgiven to the customer. |
| Aug. 10 | Collected payment from Salon World, fully paying off the accountbalance. |
| Aug. 20 | Sold two at-home spa kits to Meghan Witzel for $500 cash. Thegoods cost NGS $160. |
| Aug. 22 | Cosmetics R Us paid itsremaining account balance in full. |
Find Net Sales & Costs of Goods Sold
Find Gross Profit Percentage (Round 2 Decimal Places)
