Exercise 4-10 (Algo) Recording sales, purchases, shipping, and returns—buyer and seller LO P1, P2Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11Sydney accepts delivery of $21,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $14,405. Sydney pays $650 cash to Express Shipping for delivery charges on the merchandise.May 12Sydney returns $1,400 of the $21,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $938.May 20Sydney 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 Retailing (buyer) records for these three transactions.2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.

A Journal entry is a primary entry that records the financial transactions initially. The…

Answered: Sydney Retailing (buyer) and Troy…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter4: Accounting For Retail Operations

Section: Chapter Questions

Problem 4.2P: Sales-related transactions The- following selected transactions were completed by Affordable...

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Exercise 4-10 (Algo) Recording sales, purchases, shipping, and returns—buyer and seller LO P1, P2

Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.

May 11	Sydney accepts delivery of $21,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $14,405. Sydney pays $650 cash to Express Shipping for delivery charges on the merchandise.
May 12	Sydney returns $1,400 of the $21,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $938.
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 gross method.)

1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.

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