Heidi's Accessories bought 50 necklaces for $10 each on account.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the return would include:

Question

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DThe correct entries to record the return of the necklaces would involve reducing the amount owed to the supplier (Accounts Payable) by the total cost of the returned necklaces including the sales tax. The original purchase was for 50 necklaces at $10 each, totaling $500. The 6% sales tax on $500 is $30, making the total amount $530. If 5 necklaces are returned, the cost of these necklaces is 5 * $10 = $50. The sales tax on this $50 is 6%, which is $3. Therefore, the total amount for the return is $53. This amount should be debited to Accounts Payable to reduce the liability and debited to Purchases Returns and Allowances to record the return of goods, reflecting both the cost of the goods and the tax paid on them.

Heidi's Accessories Bought 50 Necklaces for $10 Each on Account