E6-14 Analyzing and Recording Sales and Gross Profit with Sales Returns [LO 6-4, LO 6-6] Cycle Wholesaling sold merchandise on account, with terms n/60, to Sarah’s Cycles on February 1 for $700 (cost of goods sold of $450). On February 9, Sarah’s Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $110). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale. Required: 1. to 3. Prepare the journal entry to record the sales, Goods returned on February 9 and Cash collected on March 2. 4. Calculate the gross profit percentage for the sale to Sarah’s Cycles. g

Answer and Explanation:

The journal entries are shown below:

Accounts Receivable $700

          To Sales Revenue $700

(Being the sales revenue is recorded)

Cost of Goods Sold $450

        To Inventory $450

(being the cost of goods sold is recorded)

Sales Revenue $175 ($700 × 1 ÷ 4)

            To Accounts Receivable $175

(Being return inventory is recorded)

Inventory $110

   To Cost of Goods Sold $110

(Being return inventory is recorded)

Cash $525

       To Accounts Receivable $525

(being cash received)

Now the gross profit percentage is

Gross Profit Percentage35.23%

= (Gross Profit ÷ Net Income)  

= ($700 - $175 - $450 + 110) ÷ ($700 - $175)

= 35.23%

mcdonald's fast-food restaurants have a well-designed training program for all new employees. each new employee is supposed to learn how to perform standardized tasks required to maintain mcdonald's service quality. due to labor shortages in some areas, new employees begin work as soon as they are hired and do not receive any off-the-job training. this nonconformity to standards creates control loss.

answer; (c) communism and socialism;