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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Sales-related transactions

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

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

To Calculate: The amount of the refund owed to the customer.

Explanation

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×percent o

b.

To determine

To Record: The sales transactions in the books of the company.

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