On jan. 3, gourmet cakes sold $15,000 of merchandise on account to jerry hines. on jan. 10, jerry returned $2,000 of the merchandise because they bought too much. assuming the cost of the returned merchandise to gourmet cakes was $500 and they use a perpetual inventory system, the journal entry on jan. 10, to record the return of the merchandise from jerry hines, would be:

sales returns & allowance     2,000 debit

            accounts receivables              2,000 credit

Inventory                                    500 debit

             COGS                                        500 credit

-to record the return of goods from Jerry Hines--

Explanation:

As the returned goods are not reported as failure or malfunction just; the customer returned as exceeds his needs, we can return them to goods ready to sale thus; inside inventory account.

We will decrease the account receivable, our COGS and increase our inventory

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.