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12 September, 14:36

On October 5, Metlock Company buys merchandise on account from Ivanhoe Company. The selling price of the goods is $5,240, and the cost to Ivanhoe Company is $3,180. On October 8, Metlock returned defective goods with a selling price of $640 and a scrap value of $310. Record the transactions of Metlock Company, assuming a perpetual approach.

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  1. 12 September, 15:42
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    The answer is given below;

    Explanation:

    Inventory Dr.$5,240

    Accounts Payable-Ivanhole Cr.$5,240

    Accounts Payable-Ivanhole Dr.$640

    Inventory Cr.$640

    The scrap value given is irrelevant as the metlock will set off the account payable of ivanhole as the goods are returned to him.
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