E5.7 (LO 2, 3, g) The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 r Pictou Ltd. sold goods to Thames Corp. for $68,000, terms n!15, FOB shipping point. The inventory had cost Pictou $36,000. Pictou's management expected a return rate of II 3% based on prior experience. -. Pictou received the balance due from Thames. Instructions 1. Record the above transactions in the books of Pictou. Shipping costs of $900 were paid by the appropriate company. Thames returned unwanted merchandise to Pictou. The returned merchandise has a sales price of $2,100, and a cost of $1,150. It was restored to inventory. 2. Record the above transactions in the books of Thames. 3. Calculate the gross profit earned by Pictou on the above transactions