question archive PiCo uses the perpetual method

PiCo uses the perpetual method

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PiCo uses the perpetual method. On February 17, FiCo sells $30,000 in merchandise on account that costs $10,000. On February 23, 10% of these goods are returned. Prepare the entry that Pico makes on February 23 to record the sales return.

a. debit Sales Returns $3,000 and credit Accounts Receivable $3,000

b. debit Sales Returns $1,000, debit Gross Profit $2,000, and credit Accounts Receivable $3,000

c. debit Sales Returns $3,000 and credit Accounts Receivable $3,000 and then debit Inventory $1,000 and credit Cost of Goods Sold $1,000

d. debit Sales Returns $3,000 and credit Accounts Receivable $3,000 and then debit Inventory $1,000 and credit Purchase Returns $1,000

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