Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $34,000 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $22,780. Sydney pays $515 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,300 of the $34,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871. 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.Record the cost of goods sold.Note: Enter debits before credits. DateGeneral JournalDebitCreditMay 11 Record the sales return.Note: Enter debits before credits. Record the cost of sales return.Record the cash collected for credit sales.

Accounts Payable Balance: $34000- $1300 = $32700 Discount for early payment $32,700 * 3% = $981

Answered: Sydney Retailing (buyer) and Troy…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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

May	11	Sydney accepts delivery of $34,000 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $22,780. Sydney pays $515 cash to Express Shipping for delivery charges on the merchandise.
	12	Sydney returns $1,300 of the $34,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871.
	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.

Record the cost of goods sold.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
May 11

Record the sales return.

Note: Enter debits before credits.

Record the cost of sales return.

Record the cash collected for credit sales.

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