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Kelly Creations is a wholesaler of hair supplies. Kelly Creations uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $33,477). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $350). c. Sold merchandise (costing $8,455) 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 $270) after year-end from sales made during the year. Required: 1. Compute Net Sales and Gross Profit for Kelly Creations. Net Sales Gross Profit $ 59,520 380 17,800 8,900 186 390

Kelly Creations is a wholesaler of hair supplies. Kelly Creations uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $33,477). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $350). c. Sold merchandise (costing $8,455) 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 $270) after year-end from sales made during the year. Required: 1. Compute Net Sales and Gross Profit for Kelly Creations. Net Sales Gross Profit $ 59,520 380 17,800 8,900 186 390

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kelly Creations is a wholesaler of hair supplies. Kelly Creations uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $33,477). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $350). c. Sold merchandise (costing $8,455) 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 $270) after year-end from sales made during the year. Required: 1. Compute Net Sales and Gross Profit for Kelly Creations. Net Sales Gross Profit $ 59,520 380 17,800 8,900 186 390
Transcribed Image Text:Kelly Creations is a wholesaler of hair supplies. Kelly Creations uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $33,477). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $350). c. Sold merchandise (costing $8,455) 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 $270) after year-end from sales made during the year. Required: 1. Compute Net Sales and Gross Profit for Kelly Creations. Net Sales Gross Profit $ 59,520 380 17,800 8,900 186 390
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