Cycle Wholesaling sells merchandise on credit terms of 2/10, n/30. A sale for $800 (cost of goodssold of $500) was made to Sarah’s Cycles on February 1. Assume Cycle Wholesaling uses a perpetual inventory system.Required:1. Give the journal entry Cycle Wholesaling would make to record the sale to Sarah’s Cycles.2. Give the journal entry to record the collection of the account, assuming it was collected in fullon February 9.3. Give the journal entry, assuming, instead, that the account was collected in full on March 2.4. Calculate the gross profit percentage for the sale to Sarah’s Cycles (rounded to one decimalplace), assuming the account was collected in full on February 9.
Cycle Wholesaling sells merchandise on credit terms of 2/10, n/30. A sale for $800 (cost of goods
sold of $500) was made to Sarah’s Cycles on February 1. Assume Cycle Wholesaling uses a perpetual inventory system.
Required:
1. Give the
2. Give the journal entry to record the collection of the account, assuming it was collected in full
on February 9.
3. Give the journal entry, assuming, instead, that the account was collected in full on March 2.
4. Calculate the gross profit percentage for the sale to Sarah’s Cycles (rounded to one decimal
place), assuming the account was collected in full on February 9.
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