profit E5-7 (LO 2, 3, 4) The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 Pictou Ltd. sold goods to Thames Corp. for $68,000, terms n/15. FOB shipping point. The inventory had cost Pictou $36,000. Pictou's management expected a return rate of 3% based on prior experience. 7 Shipping costs of $900 were paid by the appropriate company. 8 Thames returned unwanted merchandise to Pictou. The returned merchandise has a sales price of $2,100, and a cost of $1,150. It was restored to inventory. 11 Pictou received the balance due from Thames. Instructions a. Record the above transactions in the books of Pictou. b. Record the above transactions in the books of Thames. e. Calculate the gross profit earned by Pictou on the above transactions