QUESTION 2(22 marks)

Britt Company sold merchandise of $3,800 to Hawthorn Enterprise on account, subject to the following terms: FOB shipping point, 2/10, n/30.The cost of goods sold was $2,000.For Hawthorn's convenience, Britt prepaid $50 of transportation fee to a Logistics Company on Hawthorn's behalf and the amount is to be added to Hawthorn's purchase invoice.

Before the discount period, Hawthorn returned $800 of merchandise to Britt because of defects in the merchandise. The cost of the merchandise returned was $500.Hawthorn paid the merchandise within the discount period less the returned.

Britt uses the perpetual inventory system while Hawthorn uses the periodic inventory system.

Required:

Journalize the above transactions in the sequence indicated below for both Britt Company (seller) and Hawthorn Enterprise (buyer).(No explanation is required).

a) Sales of merchandise

b)Transportation charges

c)Returned of merchandise

d)Payment of merchandise