GL Chemical Company sells seeds and chemical to stores and dept chain stores. GL Chemical Co’s policy is to ship goods to retailers in late winter on consignment basis. A rep for the company counts the goods on hand at retailer, based on this count, the previous count and intervening shipments, it was determined how many items the retailer has sold since previous count and the retailer was billed for these goods by GL Chemical.

a. Assume GL Chemical shipped goods costing $8,400 and with a wholesale price (price to retailer not consumer) of $12,600 to Carter Garden Shop. Prepare journal entries to record this entry

(1) On GL Chemical’s book

(2) On Carter’s book

b. Later, the rep count indicated that Carter’s has sold some of these goods, totaling $6,720 at retail, $5,040 at wholesale, and $3,360 at GL’s cost. Prepare journal entries to reflect these sales

(1) On GL’s books

(2) On Carter’s books.