Exercise 6-6 On June 3, 2017, Pharoah Company sold to Ann Mount merchandise having a sales price of $9,400 (cost $6,300) with terms of 2/10, n/60, f.o.b. shipping point. Pharoah estimates that merchandise with a sales value of $940 will be returned. An invoice totalling $130, terms n/30, was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 5, Mount notified Pharoah that $400 of merchandise contained flaws. The same day, Pharoah issued a credit memo covering the defective merchandise and asked that it be returned at Pharoah's expense. Pharoah estimated the returned items to have a fair value of $210. The freight on the returned merchandise was $26, paid by Pharoah on June 7. On June 12, the company received a cheque for the balance due from Mount. Ily. June 5, 2017 Inventory 210 X Estimated Inventory Returns 2101 (To reduce estimated inventory returns.) June 7, 2017 Delivery Expense 26 Cash 26 June 8, 2017 Cash 9,000 x Accounts Receivable 9,000