Question

On June 15, a food wholesaler sold 100 cases of canned soup to Happy Foods for $30 per case with terms of 2/10, n/30. On June 17, Happy returned 20 cases of damaged inventory (and received full credit), along with a check for the amount due for the purchase.
Given this information, the journal entry by Happy Foods on June 17 will:
A. Debit Accounts Receivable for $3,000.
B. Credit Cash for $2,940.
C. Debit Cash for $2,352.
D. Credit Inventory for $648.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

On June 17

Food wholesaler A/c Dr $600       (20 cases × $30)

    To Purchase return $600

(Being returned goods are recorded)

Food wholesaler A/c Dr $600  $2,352

   To Bank A/c                                               $2,352

(Being payment is made)

(Being cash received recorded)

The computation is shown below:

= (Credit purchase - returned goods ) - (Credit purchase - returned goods ) × percentage given

= (100 case × $30 - $600)  -  (100 case × $30 - $600) × 2%

= ($3,000 - $600) - ($3,000 - $600) × 2%

= $2,400 - $48

= $2,352

This is the answer but the same is not provided in the given options