Exercise 4-10 (Algo) Recording sales, purchases, shipping, and returns-buyer and seller LO P1, P2 Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $32,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $21,775. Sydney pays $315 cash to Express Shipping for delivery charges on the merchandise. May 12 Sydney returns $1,300 of the $32,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871. May 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. Required 1 Required 2 Prepare journal entries that Troy Wholesalers (seller) records for these three transactions. No 1 Date May 11 General Journal Accounts receivable Sales 2 May 11 Cost of goods sold Merchandise inventory Debit 32,500 Credit 32,500 21,775 21,775 3 May 12 Sales returns and allowances 1,300 Accounts receivable 1,300 4 May 12 50 Merchandise inventory Cost of goods sold May 20 Cash Sales discounts Accounts receivable 871 871 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. No Date General Journal 1 May 11 Merchandise inventory Accounts payable 2 May 11 Merchandise inventory 3 May 12 4 May 20 Cash Accounts payable Merchandise inventory Accounts payable Cash Merchandise inventory >> < Required 1 Required 2 > Debit Credit 32,500 32,500 315 315 1,300 1,300 32,500 X 31,525 X 975 X