cle Wholesaling sold merchandise on account, with terms n/60, to Sarah’s Cycles on February 1 for $1,200 (cost of goods sold of $700). On February 9, Sarah’s Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $190). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale. Required:1. to 3. Prepare the journal entry to record the sales, Goods returned on February 9 and Cash collected on March 2.4. Calculate the gross profit percentage for the sale to Sarah’s Cycles.

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Asked Mar 8, 2019
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cle Wholesaling sold merchandise on account, with terms n/60, to Sarah’s Cycles on February 1 for $1,200 (cost of goods sold of $700). On February 9, Sarah’s Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $190). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale.

 

Required:

  1. 1. to 3. Prepare the journal entry to record the sales, Goods returned on February 9 and Cash collected on March 2.

  2. 4. Calculate the gross profit percentage for the sale to Sarah’s Cycles.

 

 

 

 

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Expert Answer

Step 1

1.

 

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Step 2

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Step 3

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