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Milan Co

Accounting

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Milan Co., a women's clothing store, purchased $120,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Milan Co. returned $16,000 of the merchandise, receiving a credit memorandum, and then paid the amount due within the discount period. Illustrate the effects on the accounts and financial statements of Milan Co. to record

(b) the merchandise return