The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 Pronghorn Ltd. sold goods to Culver Corp. for $60,900, terms n/15, FOB shipping point. The inventory had cost Pronghorn $32,300. Pronghorn's management expected a return rate of 3% based on prior experience. 7 Shipping costs of $820 were paid by the appropriate company. Culver returned unwanted merchandise to Pronghorn. The returned merchandise has a sales price of $1,880, and a cost of $1,020. It was restored to inventory. 11 Pronghorn received the balance due from Culver. Date Account Titles and Explanation Debit Credit Dec. 3 Accounts Receivable 60900 Sales 60900 (To record credit sale) Dec. 3 Cost of Goods Sold 32300 Inventory 32300 (To record cost of merchandise sold) Dec. 8 Sales Returns and Allowances 1880 Cash 1880 Dec. 8 Inventory 1020 Cost of Goods Sold 1020 (To record return of goods) Dec. 7 (To record cost of merchandise returned) Dec. 11 Cash 59020 Accounts Receivable 59020