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On September 12, Fang Company sold merchandise of $5,800 to Brown Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Fang uses the perpetual inventory system and the net method of accounting for sales. On September 14, Brown returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350

On September 12, Fang Company sold merchandise of $5,800 to Brown Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Fang uses the perpetual inventory system and the net method of accounting for sales. On September 14, Brown returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 9EB: Blue Barns sold 136 gallons of paint at $31 per gallon on July 6 to a customer with a cost of $19...
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On September 12, Fang Company sold merchandise of $5,800 to Brown Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Fang uses the perpetual inventory system and the net method of accounting for sales. On September 14, Brown returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Brown pays the invoice on September 18 and takes the appropriate discount. The journal entry that Fang makes on September 18 is:

 

Multiple Choice
  •  
    Account Title Debit Credit
    Cash 5,800  
    Accounts Receivable   5,800
  •  
    Account Title Debit Credit
    Cash 5,194  
    Accounts Receivable   5,194
  •  
    Account Title Debit Credit
    Cash 5,194  
    Sales Discounts 106  
    Accounts Receivable   5,300
  •  
    Account Title Debit Credit
    Cash 5,684  
    Accounts Receivable   5,684
  •  
    Account Title Debit Credit
    Cash 5,684  
    Sales Discounts 116  
    Accounts Receivable   5,800
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