Question

Exercise 4-23A (Algo) Periodic-Recording sales, purchases, shipping, and returns: buyer and seller .O P5 Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. lay 11 Sydney accepts delivery of $22,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $14,740. Sydney pays $660 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $2,600 of the $22,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,742. 20 Sydney 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. I. 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 X 1 Sydney accepts delivery of $22,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $14,740. > resale bint. The 2 Record the transportation cost paid to express shipping. 3 Sydney returns $2,600 of the $22,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,742. Credit 4 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Note : = journal entry has been entered Record entry Clear entry View general journal

Answer 1

Solution1: Following are the journal entries Sydney Reatiling will record:

Date Account Title and expliantaion Debit Credit Working 11-May Marchandise Inventory $ 22,000 Accounts Payble $ 22,000 (Purchase of Goods Recorded) $ 660 11-May Mercahndise Inventory Cash (Shipping Charges Recorded) $ 660 $ 2,600 12-May Accounts Payble Marchandise Inventory (Goods Returned Recorded) $ 2,600 $ 19,400 20-May Accounts Payble Merchandise Inventory Cash (Payment made recorded) (22000-2600) $ 582 (22000-2600) *3% $ 18,818 (19400 - 582)

Answer 2. Following are the journal entries Troy Wholesaler will record

Credit Working Date Account Title and expliantaion Debit 11-May Accounts Recivable $ 22,000 Sales Revenue (Sale of Goods Recorded) $ 22,000 $ 2,600 12-May Sales Return and Allowance Accounts Recivable (Goods Returned Recorded) $ 2,600 $ 18,818 $ 582 20-May Cash Sales Discount Accounts Receivable (Cash Collected Recorded) (19400 - 582) (22000-2600) *3% $ 19,400 (22000-2600)