Acompany sold merchandise for $24,000 on account with terms of 5/15, n/30. the company uses a perpetual inventory system. after two days, it received defective merchandise worth $4,000. the journal entry to record the cash receipt for the sale if the payment is received within 10 days of the invoice date would include a) a debit to cash for $20,000, a credit to merchandise inventory for $1,000, and a credit to sales revenue for $19,000. b) a debit to cash for $19,000, a debit to sales discount for $1,000, and a credit to accounts receivable for $20,000 c) a debit to cash for $20,000, a debit to merchandise inventory for $4,000, and a credit to accounts receivable for $24,000. d) a debit to sales revenue for $24,000, a credit to accounts receivable for $20,000, and a credit to sales discounts for $4,000

OPTION B

Cash     debit for 19,000

Sales Discount  debit for 1,000

            Account receivable      credit for 20,000

Explanation:

First, notice that this entry to record the payment of the invoice, so we are settlng this customer account, we are not recording the sale, that was done 10 days ago.

Same applies to the merchandise return, that was 2 days ago so we don't have to record that, only the cash payment from the customer.

                             The company sold merchandise for 24,000

                                             Then the customer return 4,000

so the total value of the account at payment date is 20,000

Because it is done within 10 days it will give a 5% discount because the term are 5/15 (5% discount within the first 15 days) n/30 (nominal AKA no discount within 30 days)

So 20,000 sale x 5% discount = $1,000 discount

lastly, nominal - discount = cash outflow

$20,000  -  $1,000 = $19,000

Resuming:

Cash     debit for 19,000  (cash receive fro mthe customer)

Sales Discount  debit for 1,000  (discount according to the sales term)

            Account receivable      credit for 20,000 (write-off the account)

it should be