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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.
-By how much should the account payable be adjusted on May 31?
A)$0
B)$112
C)$120
D)$592

Question

Quizplus · Accepted Answer

The purchase was recorded at net amount, which means Ryerson initially recorded the purchase as $5,880 ($6,000 - 2% discount). After returning $400, the net purchase becomes $5,480. Since the payment was not made within the discount period, the discount of $112 (2% of $5,600) needs to be added back to the accounts payable.

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