Answer:
The option a. is correct
Step-by-step explanation:
a.is correct
The journal entry will be;
Sales Returns and Allowances Dr.$500
Accounts Receivable Cr.$500
(To record reversal of the sale of $500 on return of merchandise)
Merchandise Inventory Dr.$350
Cost of Goods Sold Cr.$350
(To record the inventory increase on return on its cost price )