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Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory...

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Accounting

Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:

a. Sold merchandise for cash (cost of merchandise $18,797). $31,200
b.

Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $210).

 350
c. Sold merchandise (costing $3,563) to a customer, on account with terms 2/10, n/30. 7,500
d. Collected half of the balance owed by the customer in (c) within the discount period. 3,675
e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid 120

1a) Prepare journal entries to record transactions (a)(e). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1b) Hair World is considering a contract to sell merchandise to a hair salon chain for $12,500. This merchandise will cost Hair World $8,800. What would be the increase (or decrease) to Hair Worlds gross profit and gross profit percentage? (Round "Gross Profit Percentage" to 1 decimal place.)

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