AC107 Unit 5 Buyer and Seller Template (1)

Buy and Seller Entries Franklin Retailing (buyer) and Sandord Wholesalers (seller) enter into the following transactions. 15-Feb 19-Feb 25-Feb Franklin pays Sanford for the amount owed. Sanford receives the cash immediately. (Both Franklin and Sanford use a perpetual inventory system and the gross method.) Instructions No Date General Journal Debit Credit 1 15-Feb Merchandise Inventory 36,000 Accounts Payable 36,000 2 15-Feb Merchandise Inventory 460 Cash 1460 3 19-Feb Accounts Payable 1,200 Merchandise Inventory 1,200 4 25-Feb Accounts Payable 34,800 Merchandise Inventory 1,044 Cash 33,756 No Date General Journal Debit Credit 1 15-Feb Accounts Receivable 36,000 Sales 36,000 2 15-Feb Cost Of Goods Sold 24,120 Merchandise Inventory 24,120 3 19-Feb Sales Returns and Allowances 1,200 Accounts Receivable 1,200 4 19-Feb Merchandise Inventory 804 Cost Of Goods Sold 804 5 25-Feb Cash    Franklin accepts delivery of $36,000 of merchandise it purchases for resale from Sanford: invoice dated October 15, terms 3/10, n/90, FOB shipping point. The goods cost Sanford $24,120. Franklin pays $460 cash to Speedy Shipping for delivery charges on the merchandise. Franklin returns $1,200 of the $36,000 of goods to Sanford, who receives them the same day and restores them to its inventory. The returned goods had cost Sanford $804. 1. Prepare journal entries that Franklin Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Sanford Wholesalers (seller) records for these three transactions.