Question

On June 3, 2014, Hunt Company sold to Ann Mount merchandisehaving a sales price of $8,560 (cost $5,992) with terms of 2/10,n/60, f.o.b. shipping point. Hunt estimates that merchandise with asales value of $856 will be returned. An invoice totaling $128,terms n/30, was received by Mount on June 8 from Olympic TransportService for the freight cost. Upon receipt of the goods, on June 5,Mount notified Hunt that $321 of merchandise contained flaws. Thesame day, Hunt issued a credit memo covering the defectivemerchandise and asked that it be returned at Hunt’s expense. Huntestimates the returned items to have a fair value of $128. Thefreight on the returned merchandise was $26, paid by Hunt on June7. On June 12, the company received a check for the balance duefrom Mount. Prepare the journal entry assuming that Ann Mount didnot remit payment until August 5



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