June 4 Deere Company purchased $3,500 worth of merchandise, terms n/30 from Gilbert Company. The cost of the merchandise was $2,500. 13 Deere returned $600 worth of goods to Gilbert for full credit. The goods had a cost of $400 to Johnson.
13 Deere paid the account in full. Assume use of the periodic inventory system for both companies.
Prepare the journal entries to record these transactions in Deere's books.

Dr merchandise inventory  $3,500

Cr accounts payable                     $3,500

Dr accounts payable         $600

Cr purchases returns and allowances    $600

Dr accounts payable($3,500-$600)  $2,900

Cr cash                                                              $2,900

Explanation:

The purchase of goods worth $3,500 means that merchandise inventory is debited with $3,500 while accounts payable is credited with the same amount.

Upon returning goods worth $600,purchases returns and allowances is credited while accounts payable is debited.

When payment is made, cash is credited while accounts payable is debited to show that the outstanding debt has been paid

i would say iii (3) because in order to compare a price you have to use as a reference other near stores because it's its

hope i explained myself