On September 12, Ryan Company sold merchandise in the amount of $8200 to Johnson Company, with credit terms of 3/10, n/30. The cost of the items sold is $5200. Ryan uses the periodic inventory system and the net method of accounting for sales. On September 14, Johnson returns some of the non-defective merchandise, which is restored to inventory. The selling price of the returned merchandise is $740 and the cost of the merchandise returned is $470. The entry or entries that Ryan must make on September 14 is (are):
A.
| Sales returns and allowances | 718? | |
| Accounts receivable | 718? | |
| Merchandise inventory | 470? | |
| Cost of goods sold | 470? |
B.
| Sales returns and allowances | 470? | |
| Accounts receivable | 470? |
C.
| Sales returns and allowances | 740? | |
| Accounts receivable | 740? |
D.
| Sales returns and allowances | 718? | |
| Accounts receivable | 718? |
E.
| Sales returns and allowances | 718? | |
| Accounts receivable | 718? | |
| Merchandise inventory | 456? | |
| Cost of goods sold | 456? |
Answer: D
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