Darin Company uses a perpetual inventory system. On October 1, Darin Company sold to inventory in the
Question:
Darin Company uses a perpetual inventory system. On October 1, Darin Company sold to inventory in the amount of $6,500 to Dee Company, terms 2/10, n/30. The items cost Darin $4,200. On October 4, Dee returns some of the inventory. This inventory had a selling price of $500 and a cost of $200. On October 8, Dee Company paid Darin Company the amount due on that date.
Use the information above to answer the following question. What journal entry (entries) will Darin Company make on October 4 to record the sales return?
Debit Sales for $500 and credit Inventory for $500
Debit Sales Returns & Allowances for $200 and credit Accounts Receivable for $200
Debit Sales Returns & Allowances and credit Accounts Receivable for $500; debit Inventory and credit Cost of Goods Sold for $200
Debit Accounts Receivable and credit Sales Returns & Allowances for $500; debit Cost of Goods Sold and credit Inventory for $200
Expert Answer:
The correct answer is Debit Sales Returns Allowances and credit Accounts Receivable for 5... View the full answer
