Solution 1 to 3:
|
Journal Entries - Cycle Wholesaling |
|
S.No |
Date |
Particulars |
Debit |
Credit |
|
1-a |
01-Feb |
Accounts
Receivable Dr |
$950.00 |
|
|
|
|
To Sales |
|
$950.00 |
|
|
|
(To
record sales) |
|
|
|
|
|
|
|
|
|
1-b |
01-Feb |
Cost of
goods sold Dr |
$575.00 |
|
|
|
|
To Merchandise Inventory |
|
$575.00 |
|
|
(To
record cost of goods sold) |
|
|
|
|
|
|
|
|
|
2-a |
09-Feb |
Sales
Returns and allownaces Dr ($950*1/4) |
$237.50 |
|
|
|
|
To Accounts Receivable |
|
$237.50 |
|
|
(To
record sales returns) |
|
|
|
|
|
|
|
|
|
2-b |
09-Feb |
Merchandise Inventory Dr |
$150.00 |
|
|
|
|
To Cost of goods sold |
|
$150.00 |
|
|
(To
reverse cost of goods returned) |
|
|
|
|
|
|
|
|
|
3 |
02-Mar |
Cash Dr
(950- 237.50) |
$712.50 |
|
|
|
|
To Accounts Receivable |
|
$712.50 |
|
|
(To
record cash collected) |
|
|
Solution 4:
Net Sales = $950 - $237.5 = $712.50
Gross profit = Net Sales - cost of good sold = $712.50 -
($575-$150) = $712.50 - $425 = $287.50
Gross profit percentage = Gross profit / net sales = $287.50 /
$712.50 = 40.35% (Rounded to 2 decimals)
