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 $31,000. Sydney pays $300 cash to Express Shipping for delivery charges on the merchandise. May 12 Sydney returns $1,000 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 $775. 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 Date General Journal Credit Debit 40,000 1 May 11 Merchandise inventory Accounts payable 40,000 2 May 11 300 Merchandise inventory Cash 300 3 May 12 1,000 Accounts payable Merchandise inventory >> 1,000 4 May 20 39,000 $ Accounts payable Merchandise inventory Cash 37,830 1,170