Ortiz Books, is a student co-op. Ortiz Books uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $153,470). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $604). c. Sold merchandise (costing $9,090) to a customer on account with terms n/30. 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 $202) after month-end from sales made during the month. $ 277,750 1,610 20,200 10,100 1,120 710 equired: Compute Net Sales and Gross Profit for Ortiz Books. Answer is complete but not entirely correct. Net Sales $294,510 Gross Profit $ 131,1440

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…