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Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following...

Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:

a. Sold merchandise for cash (cost of merchandise $160,230). $ 292,600
b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $920). 1,720
c. Sold merchandise (costing $12,600) to a customer on account with terms n/30. 28,000
d. Collected half of the balance owed by the customer in (c). 14,000
e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. 1,960

1. Compute Net Sales and Gross Profit for Campus Stop.

2. Compute Gross Profit percentage. (Round to two decimal places.)

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Answer #1
Answer to Question 1.
Sales Revenue = $292,600+ $28,000
Sales Revenue = $320,600
Net Sales = Sales Revenue – Sales Return and Allowances – Sales Discount
Sales Return and Allowances = $1,720 + $1,960 = 3680
Sales Discount = $28,000 * ½ * 2% = $280
Net Sales = $320,600- $3,680 - $280 = 316,640
Cost of Goods Sold = $160,230 - $920 + $12600 = $171,910
Gross Profit = Net Sales – Cost of Goods Sold
Gross Profit = $316,640 - $171,910
Gross Profit = $144,730
Answer to Question 2.
Gross Profit Percent = Gross Profit / Net Sales * 100
Gross Profit Percent = 144,730 / 316,640* 100
Gross Profit Percent = 45.71%
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