Answer:
Accounts Receivable 5,000 debit
Sales revenues 5,000 credit
COGS 2,400 debit
Inventory 2,400 credit
Sales Returns 1,000 debit
Accounts Receivable 1,000 credit
Cash 3,880 debit
SalesDiscount 120 debit
Accounts Receivable 4,000 credit
Explanation:
We record the sales revenues and the account the custoemr will have to setlte.
Then we record the decrease in our invenory for the goods we delivered and recognize the COGS
The return decreases the amount due fro mthe customer.
We aren't given information about the inventory being able to be restored or entering the inventory.
We should assume it is not available for resales, thus we don't increase our inventory.
The customer pays within discount period: "3/10"
3% discount within first 10 days
dsicount: 4,000 x 3% =120
cash collection: 3,880
Wewrite-off the receivable
