On September 12, Ryan Company sold merchandise in the amount of $5,800 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. 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 $500 and the cost of the merchandise returned is $350. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Ryan makes on September 18 is:
A.
| Cash | 5,194 | |
| Sales discounts | 106 | |
| Accounts receivable | 5,300 |
B.
| Cash | 5,194 | |
| Accounts receivable | 5,194 |
C.
| Cash | 5,684 | |
| Sales discounts | 116 | |
| Accounts receivable | 5,800 |
D.
| Cash | 5,800 | |
| Accounts receivable | 5,800 |
E.
| Cash | 5,684 | |
| Accounts receivable | 5,684 |
Answer: B
Business
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