Concept explainers
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
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Exorcise 5-23c
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.
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Chapter 5 Solutions
Principles of Financial Accounting.
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