What is the amount of the refund owed to the customer? Journalize the entries made by the seller to record the return and the refund. ?

After the amount due on a sale of $23,300, 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 on March 1. The cost of the merchandise returned was $17,090.

Required:

(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. Refer to the Chart of Accounts for exact wording of account titles.

2 Answers

Relevance
  • 4 weeks ago

    This has nothing to do with taxes.

  • Anonymous
    4 weeks ago

    Because the customer paid within the discount period, I think we are supposed to assume the customer took the 2% discount.  At the time of the sale the entry is:

                                  DR         CR

    Cash                   22,834

    Sales Discount        466

         Sales                           23,300

    The return of the merchandise causes a reverse of the journal entry.  The refund to the customer is $22,834; that's the credit to cash.  Credit Sales Discount for $466 and debit sales for $23,300.

Still have questions? Get answers by asking now.