Question:

March 18: Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of merchandise returned was $2,900.

(note that the merchandise was purchased on account for 27,500, terms FOB shipping point 1/10, n/30. The cost of merchandise sold was $16000)

I am to journalize this entry. I entered:

Customer Refunds Payable $4800(debit)

Accounts Receivable $4800 (credit)

*********** HOWEVER it is stating the amounts are incorrect. This is where I am confused as to where I went wrong

I am having a really difficult time figuring out problem PR6-2A, entry for March 18 and the credit memo. Can someone walk me through the steps to help me figure out why I am getting the incorrect amount?

IBSN:978-1-285-74361-5