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Ryerson Corp.records purchases at net amounts.On May 5, Ryerson purchased merchandise on account costing $6,000 (gross), terms 2/10, n/30.Ryerson returned $400 of the May 5 purchase and received credit on account.At May 31 the balance had not been paid.
-The amount to be recorded as a purchase return is
A)$408.
B)$400.
C)$392.
D)$360.

Question

Quizplus · Accepted Answer

The purchase return is calculated as the gross amount of the returned merchandise multiplied by the complement of the discount rate. In this case, the gross amount of the returned merchandise is $400 and the discount rate is 2%. Therefore, the purchase return is $400 x (1 - 2%) = $392.

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