Question

After the amount due on a sale of $30,400, terms 2/10, n/eom, is received from a customer within the discount period, the seller consents to the return of the entire shipment for a cash refund on March 1. The cost of the merchandise returned was $13,060.

a. What is the amount of the refund owed to the customer? $ _______
b. Journalize the entries made by the seller to record (a) the refund and ( 2) the return of merchandise.
A. Sales Retirned and Allowances ____
Sales Discounts _____
Cash _____-
B. Merchandise Inventory _______
Cost of Merchandise Sold _____

Answer 1

a. The amount refund owed to the customer is : $29,792

b. To record the refund and the return of merchandise:

Dr Sales returned and Allowances $30,400

Cr Sales Discounts $608

Cr Cash $29,792

(to record the refund of $30,400 sales with sales discount of $608 made)

Dr Merchandise Inventory $13,060

Cr Cost of Merchandise sold $13,060

(to record the impact of the $30,400 sales refund on cost of merchandise sold and merchandise inventory)

Step-by-step explanation:

- Further explanation for sell discounts calculation:

As the terms is 2/10, total discount had been given as calculated below:

$30,400 x 2% = $608.