Required information CC6-1 Accounting for Merchandising Operations [LO 6-4, LO 6

Question

Required information CC6-1 Accounting for Merchandising Operations [LO 6-4, LO 6-5, LO 6-6) [The following information applies to the questions displayed belowJ Nicole's Getaway Spa (NGS) has been so successful that Nicole has decided to expand her spa by selling merchandise. She sells things such as nail polish, at-home spa kits, cosmetics, and aromatherapy items. Nicole uses a perpetual inventory system and is starting to realize all of the work that is created when inventory is involved in a business. The following transactions were selected from among those completed by NGS in August. Aug. 2 Sold a bundle of spa services with a merchandise basket. when sold separately, the spa service part of the bundle sells for $40e and the merchandise basket normally sells for $100. Together, the bundle was sold to Val Amy for cash at a selling price of $450 (total). Val booked a spa treatment for August 10, and she took the basket of goods with her. The goods had cost NGS $80 Aug. 3 Sold 5 identical items of merchandise to Cosmetics R Us on account at a Aug. 6 Cosmetics R Us returned one of the five items purchased on August 3. The Aug. 10 Val Amy used one of the three spa treatments she had purchased as part of Aug. 20 Sold two at-home spa kits to Meghan witzel for $300 cash. The goods cost NGS selling price of $5e0 (total); terms n/3e. The goods cost NGS $400. item could still be sold by NGs in the future and credit was given to the customer. the bundle sold to her on August 2. $96. Aug. 22 Cosmetics R Us paid its remaining account balance in full. CC6-1 Part 2 2-0. Calculate the Sales Revenue and Cost of Goods Sold for the transactions listed above (but exclude Service Revenue for spa services) Sales Revenue Cost of Goods Sold

Explanation / Answer

Sales Revenue COGS 2-Aug 0 0 3-Aug 500 400 6-Aug -100 -80 10-Aug 0 0 20-Aug 300 96 22-Aug 0 0 Total 700 416 2a) Sales Revenue (excluding services) = $700 COGS (excluding services) = $416 2b) Nicole's getaway spa's gross profit (excluding services)= 700 - 416 = 284 %age of gross profit = 40.57%

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