Required information CP6-3 (Algo) Recording Cash Sales, Credit Sales, Estimated and Actual Sales Returns, and Sales Allowances, and Analyzing Gross Profit Percentage [LO 6-4, LO 6-6] [The following information applies to the questions displayed below.] Myers Books & More, is a student co-op. Myers Books & More uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $160,470). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $624). c. Sold merchandise (costing $9,540) 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 $212) after month-end from sales made during the month. CP6-3 (Algo) Part 4 4. Myers Books & More is considering a contract to sell merchandise to a Myers Books & More organization for $16,200. This merchandise will cost Myers Books & More $12,960. Would this contract increase (or decrease) Myers Books & More dollars of gross profit and its gross profit percentage? TIP: The impact on gross profit dollars may differ from the impact on gross profit percentage. (Round "Gross Profit Percentage" to 1 decimal place.) Gross Profit Gross Profit Percentage by to $ 291,500 1,690 21, 200 10,600 1,220 760 %

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…