Assume the perpetual inventory method is used.The company purchased $12,700 of merchandise on account under terms 4/10, n/30.The company returned $2,200 of merchandise to the supplier before payment was made.The liability was paid within the discount period.All of the merchandise purchased was sold for $19,400 cash.What effect will the return of merchandise to the supplier have on the accounting equation?

The perpetual inventory method is one of the method in which record of inventory is maintained…

Answered: Assume the perpetual inventory method…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 11MC: A retailer returns $400 worth of inventory to a manufacturer and receives a full refund. What...

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Assume the perpetual inventory method is used.

The company purchased $12,700 of merchandise on account under terms 4/10, n/30.
The company returned $2,200 of merchandise to the supplier before payment was made.
The liability was paid within the discount period.
All of the merchandise purchased was sold for $19,400 cash.

What effect will the return of merchandise to the supplier have on the accounting equation?

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