PART B: SELLING INVENTORY

Prepare Journal Entries to record the following sales transactions in Carriage and Tow Companys books. Carriage and Tow Co. uses a perpetual inventory system.

May 5. Carriage and Tow Co. sold $35,000 of merchandise to The Phosphorescent Lime Company, terms 4/15 n/30, FOB destination point. The cost of the merchandise sold was $26,000.

May 6. The correct company paid freight costs of $900.

May 9. The Phosphorescent Lime Company returned $7,000 of the merchandise purchased on May 5^th because it was not needed. The cost of the merchandise returned was $4800, and it was recorded to inventory.

May 12. Carriage and Tow Co. received the balance due from The Phosphorescent Lime Company.