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RECORD THE TRANSACTIONS FOR OAKLEY, THE SELLER
Assume Oakley Incorporated-the maker of stylish sunglasses, goggles, and many other leading products-
a) Made merchandise costing $150,000 and sold the merchandise on credit to Sunglass Hut for $375,000 with terms 2/10, n/30.
b) SUNGLASS HUT, the customer, RETURNED TO OAKLEY $20,000 of the merchandise purchased --Oakley reduced Sunglasss account by the return.
c) Sunglass Hut paid the remaining balance within the discount period.
| | Account | Debit | Credit |
| a) | ACCOUNTS RECEIVABLE | 375000 | |
| | SALES | | 375000 |
| | COST OF GOODS SOLD | 150000 | |
| | INVENTORY | | 150000 |
| | | | |
| b) | SALES RET AND ALLO | 20000 | |
| | ACCOUNTS RECEIVABLE | | 20000 |
| | INVENTORY | 8000 | |
| | COST OF GOODS SOLD | | 8000 |
| c) | CASH | 347900 | |
| | SALES DISCOUNT | 7100 | |
| | ACCOUNTS RECEIVABLE | | 355000 |
How do you find the cost of inventory and cost of golds sold in B) from the amount returned?
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