Respuesta :
Explanation:
The journal entries are shown below:
On February 1
Account receivable - Sarah’s Cycles A/c Dr $550
To Sales $550
(Being the goods are sold on credit)
Cost of goods sold A/c Dr $375
To Merchandise Inventory A/c $375
(Being goods are sold at cost)
On February 9
Sales return and allowance A/c Dr $137.50 ($550 ÷ 4)
To Accounts receivable - Sarah’s Cycles $137.50
(Being sales return is recorded)
Merchandise Inventory A/c $85
To Cost of goods sold A/c Dr $85
(Being sales return is recorded)
On March 2
Cash A/c Dr $412.50 ($550 - $137.50)
To Accounts receivable - Sarah’s Cycles $412.50
(Being cash is received)
The net profit margin is
= (Net sales - Cost of goods sold) ÷ Net sales
= ($412.50 - $290) ÷ ($412.50)
= 29.69%
The cost of goods sold
= $375 - $85
= $290
The journal entries to record the transactions are: Debit Account receivable - Sarah’s Cycles $550; Credit Sales $550.
Journal entries
Cycle Wholesaling journal entries
February 1
Debit Account receivable - Sarah’s Cycles $550
Credit Sales $550
Debit Cost of goods sold $375
Credit Merchandise Inventory A/c $375
February 9
Debit Sales return and allowance $137.50
($550 ÷ 4)
Credit Accounts receivable - Sarah’s Cycles $137.50
Debit Merchandise Inventory $85
Credit Cost of goods sold $85
March 2
Debit Cash $412.50
($550 - $137.50)
Credit Accounts receivable - Sarah’s Cycles $412.50
Net profit margin:
Net profit margin= (Net sales - Cost of goods sold) ÷ Net sales
Net profit margin= ($412.50 - $290) ÷ ($412.50)
Net profit margin= 29.69%
Cost of goods sold:
Cost of goods sold= $375 - $85
Cost of goods sold= $290
Inconclusions the journal entries to record the transactions are: Debit Account receivable - Sarah’s Cycles $550; Credit Sales $550
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