Chapter 5, Problem 23E

Recording sates, purchases. shipping. and returns—buyer and setter

P1 P2

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

and Troy use a perpetual inventory system and the gross method.

Check (1) May 20. Cc Cash. $37,442

May 11 Sydney accepts delivery of $40,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90. FOB shipping point. The goods cost Troy $30,000. Sydney pays $345 cash to Express Shipping for delivery charges on the merchandise.

12 Sydney returns SI,400 of the $40,000 of goods Co Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,050.

20. Sydney pays Troy for the amount owed. Troy receives the cash immediately.

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.

Exorcise 5-23^c

Recording sales, purchases. shipping, and returns: buyer and seller-perpetual nod net method  P7

Refer to Exercise 5-7 and prepare journal entries to record each of the merchandising transactions assuming that the perpetual ¡memory system and the net method are used by both the buyer and the seller.