151k views
4 votes
On October 1, Mutch Company sold merchandise in the amount of $5,800 to Carr Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Mutch uses the perpetual inventory system. On October 4, Carr returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Mutch must make on October 4 is:

User Tysonjh
by
7.6k points

1 Answer

3 votes

Answer:

Dr Sale returns and allowance 500

Cr Account receivable 500

Dr Merchandise inventory 350

Cr Cost of goods sold 350

Step-by-step explanation:

Since we were told that On October 4, Carr made a return of some of the merchandise in which the merchandize selling price was the amount of $500 while the cost of the merchandise returned was the amount of $350. This means that the Journal entry or entries in which Mutch must make on October 4 will be :

Dr Sale returns and allowance 500

Cr Account receivable 500

Dr Merchandise inventory 350

Cr Cost of goods sold 350

User MUNGAI NJOROGE
by
8.7k points

Related questions

asked Nov 20, 2017 186k views
Bsautner asked Nov 20, 2017
by Bsautner
7.6k points
2 answers
3 votes
186k views