Basically Beautiful Wholesaler Sells Beauty Products to Salons and Spas

question 19

Short Answer

Basically Beautiful Wholesaler sells beauty products to salons and spas. The company's sales for the period ended December 31, 2020 were $1,175,000. The cost of sales are estimated at 60% of revenues, with an estimated return rate of 5%. Returned product is expected to be scrapped. All sales are made on account.
Instructions
a) Prepare Basically Beautiful's partial Statement of Income.
b) Record Basically Beautiful's sales for the period.

---

Definitions:

FICA Tax

A federal tax in the United States, consisting of a Social Security tax and a Medicare tax, deducted from employees' paychecks to fund these programs.

Payroll Information Sheet

A document that contains details about an employee's salary, deductions, and other payroll-related information.

Social Security Number

A unique nine-digit number assigned to individuals in the United States for tracking earnings and benefits within the social security system.

Beneficiary

A person or entity entitled to receive benefits or funds under a will, insurance policy, retirement plan, or other contract.