Question

Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $26,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $17,420. Sydney pays $520 cash to Express Shipping for delivery charges on the merchandise. urns $2,100 of the $26,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,407. 20 Swaney pays Troy for the amount owed. Troy receives the cash immediately. Assume that both buyer and seller use a periodic inventory system and the gross method. 1. Prepare journal entries that Sydney Retailing buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries that Sydney Retailing (buyer) records for these three transactions View transaction list Journal entry worksheet < 1 2 3 Sydney accepts delivery of 526.000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, 1/90, FOB shipping point. The goods cost Troy $17,420. Note: Enter debits before credits < Prev 18 of 16 e web and your PC

Answer 1

Journal entries for seller

Date	General Journal	Debit	Credit
May 11	Purchase	26000
	Account payable		26000
	Freight in	520
	Cash		520
May 12	Account payable	2100
	Purchase return and allowance		2100
May 20	Account payable	23900
	Cash (23900*97%)		23183
	Purchase discount		717

Journal entry (Seller)

Date	account and explanation	Debit	Credit
May 11	Account receivable	26000
	Sales revenue		26000
May 12	Sales return and allowance	2100
	Account receivable		2100
May 20	Cash	23183
	Sales discount	717
	Account receivable		23900