Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000

Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000. Compute gross profit (using the unadjusted numbers above). The company expects future returns and allowances equal to 5% of sales and 5% of cost of sales. Prepare the year-end adjusting entry to record the sales expected to be refunded. Prepare the year-end adjusting entry to record the cost side of sales returns and allowances. Recompute gross profit (using the adjusted numbers from parts 1 and 2). Is the Sales Refund Payable an asset, liability, or equity account? Is the Inventory Returns Estimated an asset, liability, or equity account?

A cell phone company offers two different plans. Plan A costs $80 per month for unlimited talk

A cell phone company offers two different plans. Plan A costs $80 per month for unlimited talk and text. Plan B costs $0.20 per minute plus $0.10 per text message sent. You need to purchase a plan for your 14-year-old sister. Your sister currently uses 1,700 minutes and sends 1,600 texts each month.

(1) What is your sister’s total cost under each of the two plans?

(2) Suppose your sister doubles her monthly usage to 3,400 minutes and sends 3,200 texts. What is your sister’s total cost under each of the two plans?

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