Pronghorn Home Electronics Corp. completed the following merchandising transactions in the month of July 2024. At the beginning of July, Pronghorns ledger showed Cash $25,000; Accounts Receivable $11,250; Inventory $13,750; Common Shares $22,500; and Retained Earnings $27,500. Pronghorn Home has experienced a return rate of 2% of sales and uses a perpetual inventory system.

July 2 Sold merchandise on account to Home Security Ltd. for $11,250, terms n/45, FOB destination. The cost of the merchandise was $7,500.

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