On May 11, Sydney Co. accepts delivery of $31,000 of merchandise it purchases for resale from Troy Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The goods cost Troy $20,770. When the goods are delivered, Sydney pays $500 to Express Shipping for delivery charges on the merchandise. On May 12, Sydney returns $2,000 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,340. On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day. (Both Sydney and Troy use a perpetual inventory system.)

1. Prepare journal entries that Sydney Co. records for these transactions.

On May 11, Sydney Co. accepts delivery of $31,000 of merchandise it purchases for resale from Troy Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The goods cost Troy $20,770.

May 11

Date

General Journal

Debit

Credit

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When the goods are delivered, Sydney pays $500 to Express Shipping for delivery charges on the merchandise.

May 11

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On May 12, Sydney returns $2,000 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,340.

May 12

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On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day.

May 20