Moon uses a perpetual inventory system.

On day 1, it purchased merchandise inventory on account from Aurora for $50,000 terms 2/10, n/30.

On day 3, Moon received credit from Aurora for $5,000 of merchandise that Moon returned.

On day 6, Moon paid Aurora the amount owing, net of any returns and discount.

On day 8 Moon had credit sales of $60,000. Moon uses a perpetual inventory system and cost of goods sold was $42,000 (70% of sales). Estimated sales returns are 10% of sales.

On day 12, Moon recorded the necessary entries for a sales return of $4,000 related to the initial credit sale of $60,000 above.

Moon uses IFRS.

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