Hair World Inc is a wholesaler of hair supplies Hair #2741

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 $ 28,797). $ 51,200 b. Received merchandise returned by
customers as unsatisfactory (but in perfect condition) for cash refund (original cost of
merchandise $ 360). 600 c. Sold merchandise (costing $ 4,750) to a customer on account with
terms 2/10, n/30. 10,000 d. Collected half of the balance owed by the customer in (c) within the
discount period. 4,900 e. Granted a partial allowance relating to credit sales that the customer in
(c) had not yet paid. 160 Required:1. Compute Sales Revenue, Net Sales, and Gross Profit for
Hair World.2. Compute the gross profit percentage (using the formula shown in this chapter and
rounding to one 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 $ 15,000. This
merchandise will cost Hair World $ 10,000. Would this contract increase (or decrease) Hair
World’s gross profit and gross profit percentage?View Solution:
Hair World Inc is a wholesaler of hair supplies Hair

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