1. Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $254,500, terms n/30. The The cost that is reported as an expense when goods is sold.cost of the goods sold is $152,700. Showcase Co. issues a A form used by a seller to inform the buyer of the amount the seller proposes to credit to the account receivable due from the buyer.credit memo for $30,000 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $17,500.

a1. Accounts Receivable - Balboa Co.	254500
Sales		254500
a2. Cost of Goods Sold	152700
Inventory		152700
b1. Sales Discount	30000
Accounts Receivable - Balboa Co.		30000
b2. Inventory	17500
Estimated Return Inventory		17500
c. Cash	224500
Accounts Receivable - Balboa Co.		224500

One in bold is incorrect.