: Prepare Bluth Co.s journal entries for each of the following transactions. Assume that a perpetual inventory method is used.

Recording Purchases of Merchandise

Bluth Co. purchases $75,000 of inventory on account, terms 2/10 net 30 from Sitwell Enterprise.

Bluth Co. returns $5,000 of inventory to Sitwell Enterprise from the initial purchase.

Bluth Co. pays the balance owed to Sitwell Enterprise, taking the discount.

Recording Sales of Merchandise (new scenario)

Bluth Co. sells merchandise on account for $29,000 (terms 3/10 net 30) to Franklin Inc. The merchandise had cost Bluth Co. $15,500.

Franklin Inc. returns $5,500 of the merchandise to Bluth Co. Assume this returned merchandise had cost Bluth Co. $2,200.

Franklin Inc. pays Bluth Co. the balance owed within 10 days of the sale.