Question

Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $25,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, POB shipping point. The goods cost Troy $16,750. Sydney pays $330 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,400 of the $25,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $938. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual 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 4 Sydney accepts delivery of $25,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, 1/90, FOB shipping point. The < Prev 3 of 3 !! Next > mi? *.

Answer 1

1
May 11	Merchandise inventory	25000
	Accounts Payable		25000
May 11	Merchandise inventory	330
	Cash		330
May 12	Accounts Payable	1400
	Merchandise inventory		1400
May 20	Accounts Payable	23600
	Merchandise inventory		708	=23600*3%
	Cash		22892
2
May 11	Accounts Receivable	25000
	Sales		25000
May 11	Cost of goods sold	16750
	Merchandise inventory		16750
May 12	Sales return and Allowances	1400
	Accounts Receivable		1400
May 12	Merchandise inventory	938
	Cost of goods sold		938
May 20	Cash	22892
	Sales discounts	708		=23600*3%
	Accounts Receivable		23600