[The following information applies to the questions displayed below.]
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 $10,797). $15,200 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $90).
150 c. Sold merchandise (costing $2,613) to a customer, on account with terms 2/10, n/30. 5,500 d. Collected half of the balance owed by the customer in (c) within the discount period. 2,695 e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid 88
Required: 1. Compute Sales Revenue, Net Sales, and Gross Profit for Hair World.
Sales Revenue Net Sales Gross Profit
2. Compute the gross profit percentage. (Round your answer to 1 decimal place.)
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.)
a1) Record the cash sales of $15,200.
a2) Record the cost of goods sold of $10,797.
b1) Record the return by a customer of unsatisfactory merchandise that was in perfect condition. A cash refund of $150 was given to the customer.
b2) Record the merchandise returned by the customer back into inventory. The original cost of the merchandise was $90.
c1) Record the sales on account of $5,500 on terms 2/10, n/30.
c2) Record the cost of goods sold of $2,613.
d) Record the collection of half of the balance of $2,695 owed by the customer within the discount period.
e) Record the allowance of $88 granted to the customer.
[The following information applies to the questions displayed below.]
| 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 $10,797). | $15,200 |
| b. | Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $90). | 150 |
| c. | Sold merchandise (costing $2,613) to a customer, on account with terms 2/10, n/30. | 5,500 |
| d. | Collected half of the balance owed by the customer in (c) within the discount period. | 2,695 |
| e. | Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid | 88 |
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| 2. | Compute the gross profit percentage. (Round your answer to 1 decimal place.) |
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| 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.) |
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a2) Record the cost of goods sold of $10,797. b1) Record the return by a customer of unsatisfactory merchandise that was in perfect condition. A cash refund of $150 was given to the customer. b2) Record the merchandise returned by the customer back into inventory. The original cost of the merchandise was $90. c1) Record the sales on account of $5,500 on terms 2/10, n/30. c2) Record the cost of goods sold of $2,613. d) Record the collection of half of the balance of $2,695 owed by the customer within the discount period. e) Record the allowance of $88 granted to the customer. |
Related questions
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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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)
