On July 1,Ferguson Company sold merchandise in the amount of $5,800 to Tracey Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Ferguson uses the perpetual inventory system and the gross method.On July 5,Tracey returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Ferguson must make on July 5 is:
A)

\begin{array} { | l | r | r | } \hline \text { Sales returns and allowances } & 500 & \\\hline \text { Accounts receivable } & & 500 \\\hline \text { Merchandise inventory } & 350 & \\\hline \text { Cost of goods sold } & & 350 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Sales returns and allowances } & 500& \\\hline \text { Accounts receivable } & & 500 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Accounts receivable } & \text { 500 } & \\\hline \text { Sales returns and allowances } & & 500 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Accounts receivable } & 500 & \\\hline \text { Sales returns and allowanes } & & 500 \\\hline \text { Cost of goods sold } & 350 & \\\hline \text { Merchandise inventory } & & 350 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Sales returns and allowances } & 350 & \\\hline \text { Accounts receivable } & & 350 \\\hline\end{array}

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