Herndon Corp. purchased merchandise on account from Likert Corp. on November 18, 2014. On November 21, 2014, Herndon returned damaged merchandise to Likert and was granted an adjustment on its account. Herndon uses the periodic inventory system. What effect does the merchandise return have on Herndons accounting equation?

	a.	Liabilities and stockholders equity decrease.
	b.	Assets and stockholders equity decrease.
	c.	Liabilities decrease and stockholders equity increases.
	d.	Assets and liabilities decrease.