Question

On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the non-defective merchandise, which is restored to inventory. The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Vander must make on September 14 is (are):

Answer 1

DR Sales returns and Allowances ............................. $500

CR Accounts Receivable........................................................$500

Step-by-step explanation:

Jepson returned $500 worth of goods so this would need to be accounted for by reducing the Accounts receivable amount by $500.

The returns will be accounted for in the Sales returns and allowances account which will be debited to reflect this.