Galaxy Company sold merchandise costing $2,100 for $3,200 cash. The merchandise was later returned by the customer for a refund. If the perpetual inventory method is used, what effect will the sales return have on the accounting equation?

ATotal assets and total equity decrease by $3,200.

BTotal assets and total equity decrease by $1,100.

CTotal assets decrease by $3,200 and total equity is decreased by $2,100.

DTotal assets and total equity increase by $1,100.