Question: sydney retailing buyer and troy wholesalers seller enter into the...
Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $39,000 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,130. Sydney pays $550 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $2,200 of the $39,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,474. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Assume that both buyer and seller use a periodic inventory system and the gross method.
1. Prepare journal entries that Sydney Retailing records for these transactions.
2. Prepare journal entries that Troy Wholesalers records for these transactions.