[The following informet Larry\'s Building Supplies (LBS) Is a local hardware sto

Question

[The following informet Larry's Building Supplies (LBS) Is a local hardware store. LBS uses a perpetual Inventory system. The following transactions (summarized) have been selected for analysis: tion applies to the questions displayed below] a. Sold merchandise for cash (cost of merchandise $273,350) b. Recelved merchandise returned by customers as unsatisfactory (but In perfect condition) $590,000 for cash refund (original cost of merchandise $3100) c. Sold merchandise (costing $5,880) to a customer on account with terms 2/10, n/30. d. Collected half of the balance owed by the customer in (c) within the discount period. 4,800 9,800 4,802 e. Granted a partial alowance relating to credit sales that the customer in (c) hed not yet paid.1550

Explanation / Answer

Gross sales 599800 Less Sales discount 98 Sales return and allowance 6350 6448 Net sales 593352 Cost of goods sold 276130 (273350-3100+5880) Net sales 593352 Less Cost of goods sold 276130 Gross profit 317222 Gross profit percentage = Gross profit / net sales Gross profit 317222 Net sales 593352 Gross profit % 53.5% Total Net sales 26000 619352 Less Cost of goods sold 19600 295730 Gross profit 6400 323622 Gross profit % 52.3% Gross profit increase by 6400 Gross profit % decrease to 52.3%

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