Required information [The following information applies to the questions displayed below.] Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $40,000 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $30,000. Sydney pays $345 cash to Express Shipping for delivery charges on the merchandise. May 12 Sydney returns $1,400 of the $40,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,050. May 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the net method.) 1. Prepare journal entries that Sydney Retailing records for these transactions. Answer is complete but not entirely correct. No General Journal Credit Date May 11 Debit 40,000 1 Merchandise inventory Accounts payable 40,000 2 May 11 Merchandise inventory 345 Coeh 245 1. Prepare journal entries that Sydney Retailing records for these transactions. Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 May 11 40,000 Merchandise inventory Accounts payable 40,000 X 2 May 11 345 Merchandise inventory Cash 345 3 May 12 1,400 Accounts payable Merchandise inventory 1,400 4 May 20 38,600 Accounts payable Merchandise inventory Cash 1,158 X 37,442 X