Final answer:
Happy Foods would make a journal entry to debit Cash for $2,352, reflecting the payment amount after applying a 2% discount to the 80 cases they kept, and adjusting for the return of the 20 damaged cases.
Step-by-step explanation:
To determine the journal entry made by Happy Foods on June 17, we need to calculate the amount paid for the cases of soup after returning the damaged inventory and accounting for the discount. Initially, Happy Foods purchased 100 cases at $30 each, which totals $3,000. However, Happy Foods returned 20 cases, thus they only need to pay for 80 cases. Without considering the discount, 80 cases would cost $2,400 (80 cases x $30 per case). Additionally, they can take advantage of the 2/10, n/30 terms, which means they receive a 2% discount if they pay within 10 days. This discount amounts to $48 (2% of $2,400). Therefore, the amount due after the discount is $2,352 ($2,400 - $48).
Considering this information, the correct journal entry by Happy Foods would be to debit Accounts Receivable for the returned goods and credit Cash for the reduced amount paid due to the discount, adjusting for the returned items. So, the correct choice from the options provided is: C. Debit Cash for $2,352.
The entry for the returned items would typically credit Inventory and debit Accounts Receivable for the amount of returned goods, which is $600 (20 cases x $30 per case).