1.

Metlock, Inc. sells merchandise on account for $2000 to Morton Company with credit terms of 2/8, n/30. Morton Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Metlock, Inc. make upon receipt of the check?

A.

Cash	1960
Sales Discounts	40
Sales Returns and Allowances		600
Accounts Receivable		1400

B.

Cash	1372
Sales Returns and Allowances	628
Accounts Receivable		2000

C.

Cash	1400
Accounts Receivable		1400

D.

Cash	1372
Sales Returns and Allowances	600
Sales Discounts	28
Accounts Receivable		2000

2.

Pina Colada Corp. returned $270 of goods originally purchased on credit from Sheffield Industries. Using the periodic Inventory approach, Pina would record this transaction as:

Inventory	270
Accounts Payable		270

Accounts Payable	270
Inventory		270

Purchase Returns and Allowances	270
Accounts Payable		270

Accounts Payable	270
Purchases Returns and Allowances		270

3.

Windsor, Inc. has the following inventory data:

July 1		Beginning inventory		42 units at $19		$798
7		Purchases		147 units at $20		2940
22		Purchases		21 units at $22		462
						$4200

A physical count of merchandise inventory on July 30 reveals that there are 70 units on hand. Using the average cost method, the value of ending inventory is

$1423.

$1400.

$1442.

$1358.