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After the amount due on a sale of $28,000, 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. The cost of the merchandise returned was $16,800. (a) What is the amount of the refund owed to the customer? (b) Journalize the entries made by the seller to record the return and the refund.

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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

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Chapter
Section
BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 6, Problem 10E
Textbook Problem
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After the amount due on a sale of $28,000, 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. The cost of the merchandise returned was $16,800. (a) What is the amount of the refund owed to the customer? (b) Journalize the entries made by the seller to record the return and the refund.

a.

To determine

Calculate the amount of the refund owed to the customer.

Explanation of Solution

Sales is an activity of selling the merchandise inventory of a business.

Calculate the amount of refund owed to the customer.

Sales = $28,000

Estimated percent of refunds = 2%

  Amount of refund owed to customer = Sales(Estimated percent ofrefunds)=Sales(Sales×x

b.

To determine

Record the sales transactions in the books of the company.

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Chapter 6 Solutions

Financial Accounting
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