Question

On September 12, Ryan Company sold merchandise in the amount of $6,800 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Ryan uses the periodic inventory system and the net method of accounting for sales. On September 14, Johnson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $400. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Ryan makes on September 18 is:

Multiple Choice

• Cash	6,800
  Accounts receivable		6,800

• Cash	6,664
  Sales discounts	136
  Accounts receivable		6,800

• Cash	6,664
  Accounts receivable		6,664

• Cash	6,076
  Sales discounts	124
  Accounts receivable		6,200

• Cash	6,076
  Accounts receivable		6,076

Answer 1

rate positively ..

	Goods sold =		6800
Less	returned		600
	net sales to be invoiced		6200
	Payment is made on 18th sept means with in discount period
	discount given = 6200*2%=		124
	Net cash received = 6200-124		6076
	Journal entry =		Dr	Cr
	cash		6076
	sales discount		124
	account receivable			6200