Fox Inc. ships merchandise on consignment to Peppy Co., a retailer on April 23, 2014. The cost of the merchandise is $34,000, and Starfox Inc. pays the freight cost of $6,000 to ship the goods to the retailer. On July 31, 2014 (Peppy Co. accounting year end), Peppy Co. notifies Fox Inc. that 80% of the merchandise has been sold for $60,000. Peppy Co. retains an 11% commission as well as $3,200, which represents advertising costs it paid, and remits the balance owing to Fox Inc. Please make sure all your final answer(s) are accurate to 2 decimal places.

Instructions:

a) Complete the journal entries required by Fox Inc. for the above transactions. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. April 23 would be 23/Apr).

Hint: There are 4 journal entries. Some journal entries may or may not require more than 2 accounts.

b) Complete the journal entries required by Peppy Co. for the above transactions on their accounting end. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. April 23 would be 23/Apr).

Hint: There are 3 journal entries. Some journal entries may or may not require more than 2 accounts.