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[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
[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. |
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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.)
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer is not complete. \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{|l|} No \\ 1 \\ \end{tabular}} & \multirow{2}{*}{\begin{tabular}{r} Date \\ May 11 \end{tabular}} & \multicolumn{2}{|c|}{ General Journal } & \multirow{2}{*}{\begin{tabular}{l} Debit \\ 40,000 \end{tabular}} & \multirow[t]{2}{*}{ Credit } \\ \hline & & Accounts receivable & & & \\ \hline & & Sales & & & 40,000 \\ \hline \multirow[t]{2}{*}{2} & May 11 & Cost of goods sold & & 30,000 & \\ \hline & & Merchandise inventory & & & 30,000 \\ \hline \multirow[t]{2}{*}{3} & May 12 & Sales returns and allowances & & 1,400 & \\ \hline & & Accounts receivable & & & 1,400 \\ \hline \multirow[t]{2}{*}{4} & May 12 & Merchandise inventory & & 1,050 & \\ \hline & & Cost of goods sold & & & 1,050 \\ \hline \multirow[t]{2}{*}{5} & May 20 & Cash & & 37,442 & \\ \hline & & Sales discounts & & 1,158 & \\ \hline \end{tabular}Step by Step Solution
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