A company using the perpetual inventory system purchased inventory worth $550,000 on account with credit terms of 2/15,n/45.Defective inventory of $70,000 was returned 3 days later,and the accounts were appropriately adjusted.If the company paid the invoice 25 days later,the journal entry to record the payment would be ________.
A)$550,000 debit to Accounts Payable and $550,000 credit to Cash
B)$480,000 debit to Accounts Payable and $480,000 credit to Cash
C)$550,000 debit to Accounts Payable,$540,400 credit to Cash,and $9,600 credit to Merchandise Inventory
D)$540,400 debit to Accounts Payable,$9,600 credit to Merchandise Inventory,and $480,000 credit to Cash

Question

Quizplus · Accepted Answer

The company returned $70,000 of inventory, reducing the payable to $480,000. Since the payment was made after the discount period, no discount is applied, so the full amount of $480,000 is paid in cash.

A Company Using the Perpetual Inventory System Purchased Inventory Worth