Prepare the necessary journal entries to record the following transactions, assuming OldmanCompany uses a perpetual inventory system.

(a)Oldman sells $54,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000.

(b)The customer in (a) returned $5,000 of merchandise to Oldman. The merchandise returnedcost $3,500.

(c)Oldman received the balance due within the discount period.

(a)Accounts Receivable .....................................................................................54,000Sales Revenue .....................................................................................54,000Cost of Goods Sold ........................................................................................37,000Inventory .............................................................................................37,000(b)Sales Returns and Allowances.......................................................................5,000Accounts Receivable ...........................................................................5,000Inventory .......................................................................................................3,500Cost of Goods Sold ..............................................................................3,500(c)Cash ($49,000 $490) ..................................................................................48,510Sales Discounts ($49,000 .01) ....................................................................490Accounts Receivable ...........................................................................49,000

explain why cost of goods sold is 37000