On October 1, Milton Company sold merchandise in the amount of $5,200 to Larry Company, with credit terms of 2/10, n/30. The cost of the items sold is $3,600. Milton uses the perpetual inventory system. On October 4, Larry returns some of the merchandise. The selling price of the merchandise is $1,000 and the cost of the merchandise returned is $330. The entry or entries that Milton must make on October 4 is: A. Sales returns and allowances 1,000 Accounts receivable 1,000 Merchandise inventory 330 Cost of goods sold 330 B. Accounts receivable 1,000 Sales returns and allowances 1,000 Cost of goods sold 330 Merchandise inventory 330 C. Sales returns and allowances 330 Accounts receivable 330 D. Sales returns and allowances 1,000 Accounts receivable 1,000 E. Accounts receivable 1,000 Sales returns and allowances 1,000 A above. B above. C above. D above. E above. Answer is A. Sales returns and allowances 1,000 Accounts receivable 1,000 Merchandise inventory 330 Cost of goods sold 330

On October 1, Milton Company sold merchandise in the amount of $5,200 to Larry Company, with credit terms of 2/10, n/30. The cost of the items sold is $3,600. Milton uses the perpetual inventory system. On October 4, Larry returns some of the merchandise. The selling price of the merchandise is $1,000 and the cost of the merchandise returned is $330. The entry or entries that Milton must make on October 4 is: A.  Sales returns and allowances 1,000          Accounts receivable 1,000      Merchandise inventory 330          Cost of goods sold 330 B.  Accounts receivable 1,000          Sales returns and allowances 1,000      Cost of goods sold 330          Merchandise inventory 330 C.  Sales returns and allowances 330          Accounts receivable 330 D.  Sales returns and allowances 1,000          Accounts receivable 1,000 E.  Accounts receivable 1,000          Sales returns and allowances 1,000       A above.       B above.       C above.       D above.       E above.

Answer is

A.  Sales returns and allowances	1,000
Accounts receivable		1,000
Merchandise inventory	330
Cost of goods sold		330