Question

On September 12, Ryan Company sold merchandise in the amount of $7.600 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4.900. 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 $680 and the cost of the merchandise returned is $440. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Ryan makes on September 18 is: Multiple Choice O 7,600 Cash Accounts receivable 7,600 6,782 Cash Accounts receivable 6,782

Answer 1

1) Journal entry

date	account and explanation	Debit	Credit
Sep 18	Cash (7600-680)*98%	6782
	Account receivable		6782
	(To record collection)

So answer is b)

2) Estimated inventory at cost = 159000*75% = 119250

So above statement is False