On September 12,Ryan Company sold merchandise in the amount of $5,800 to Johnson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.
-Ryan uses the periodic inventory system and the net method of accounting for sales.On September 14,Johnson returns some of the non-defective merchandise,which is restored to inventory.The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Ryan must make on September 14 is (are):

Question

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Since Ryan uses the net method of accounting, the sales returns are recorded as a decrease in sales revenue and a decrease in inventory. Therefore, on September 14, Ryan should make the following entry:

Accounts Receivable - Johnson Company $500
Sales Returns and Allowances             $500
Cost of Goods Sold                            $350
Inventory                                            $350

On September 12,Ryan Company Sold Merchandise in the Amount of $5,800