The following merchandise transactions occurred in December. Both companies use a perpetual inventory system.

Dec.	3		Blue Spruce Ltd. sold goods to Swifty Corp. for $77,800, terms n/15, FOB shipping point. The inventory had cost Blue Spruce $41,400. Blue Spruces management expected a return rate of 3% based on prior experience.
	7		Shipping costs of $1,080 were paid by the appropriate company.
	8		Swifty returned unwanted merchandise to Blue Spruce. The returned merchandise has a sales price of $2,400, and a cost of $1,280. It was restored to inventory.
	11		Blue Spruce received the balance due from Swifty.

Date Account Titles and Explanation Debit Credit Dec. 3 Accounts Receivable 77800 Sales 77800 No Entry 0 (To record credit sale) Dec.3 Cost of Goods Sold 41400 Inventory 41400 No Entry 0 (To record cost of merchandise sold) Freight OutInventory Dec. 7 1,280 Cash 1,280 Dec. 8 Sales Returns and Allowances 2,400 Accounts Receivable 2,400 (To record return of goods) Dec. 8 Cost of Goods Sold 1,080 1,080 (To record cost of merchandise returned) Dec. 11