Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following transactions
Question:
a. Sold merchandise for cash (cost of merchandise $ 152,070). $ 275,000
b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $ 800). 1,600
c. Sold merchandise (costing $ 9,000) to a customer on account with terms 2/10, n/30. 20,000
d. Collected half of the balance owed by the customer in (c) within the discount period. 9,800
e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid. 1,800
Required:
1. Compute Sales Revenue, Net Sales, and Gross Profit for Campus Stop.
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. Campus Stop is considering a contract to sell merchandise to a campus organization for $ 15,000. This merchandise will cost Campus Stop $ 12,000. Would this contract increase (or decrease) Campus Stop’s gross profit and gross profit percentage (round to one decimal place)?
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Req 1 Sales Revenue 275000 20000 295000 Sales Discounts 20000 x 50 collected x 2 200 Sales Returns a...View the full answer
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Related Book For 
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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