Question

Saved Sydney Retalling (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $38,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terns 3/10, n/90, POB shipping point. The goods cost Troy $25,795. Sydney pays $450 cash to Express Shipping for delivery charges on the merchandise 12 Sydney return $1,200 of the $30,500 of goods to Troy, who receives then the same day and restores them to its inventory. The returned goods had cost Troy $804. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Both Sydney and Troy use a perpetual inventory system and the gross method.) 1. Prepare journal entries that Sydney Retalling (buyer) records for these three transactions 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions Complete this question by entering your answers in the tabs below. Required Required 2 Prepare journal entries that Sydney Retaling (buyer) records for these three transactions View action lit Journal entry worksheet 1 2 Syy accepts delivery of $38.500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 1/10, 90, FOB shipping point. The goods cost Troy $25.795 ter bort Debit May 11 Credit < Prey Next > MacBook Pro 44 F II > 11 w # A 2 $ 4 % 5 6 6 & 7 * 00 9 0 1A

Answer 1

Requirement 1:

Journal Entries (Sydney)
Date	General Journal	Debit	Credit
May 11	Merchandise Inventory	$ 38,500
	Accounts payable		$ 38,500
	[To record purchase of inventory]
	Merchandise Inventory	$ 450
	Cash		$ 450
	[To record payment of freight]
May 12	Accounts payable	$ 1,200
	Merchandise Inventory		$ 1,200
	[To record purchase returns]
May 20	Accounts payable [38,500 - 1200]	$ 37,300
	Merchandise Inventory [37300 x 3%]		$ 1,119
	Cash		$ 36,181
	[To record payment of purchases]

Requirement 2:

Journal Entries (Troy)
Date	General Journal	Debit	Credit
May 11	Accounts receivable	$ 38,500
	Sales revenue		$ 38,500
	[To record sales revenue]
	Cost of goods sold	$ 25,795
	Merchandise Inventory		$ 25,795
	[To record cost of goods sold]
May 12	Sales returns and allowance	$ 1,200
	Accounts receivable		$ 1,200
	[To record sales returns]
	Merchandise Inventory	$ 804
	Cost of goods sold		$ 804
	[To record cost of goods returned]
May 20	Cash	$ 37,300
	Sales discount		$ 1,119
	Account receivable		$ 36,181
	[To record received cash on sales]