0 Required Information [The following information applies to the questions displayed below] Ramos Hair Styling is a wholesaler of hair supplies. Ramos Hair Styling uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $30,957). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $280). c. Sold merchandise (costing $6,460) to a customer on account with terms n/60. d. Collected half of the balance owed by the customer in (c). e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. f. Anticipate further returns of merchandise (costing $200) after year-end from sales made during the year Required: 1. Compute Net Sales and Gross Profit for Ramos Hair Styling Net Sales Gross Profit $ 55,040 310 13,600 6,800 172 320

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is