Welcome, Babatunde- B x MTEST CHAPTERS O MTEST CHAPTERS 5 &6 x Home- x welcome,

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Welcome, Babatunde- B x MTEST CHAPTERS O MTEST CHAPTERS 5 &6 x Home- x welcome, Babatunde" Bi) × TEST CHAPTERS 5 & 6 Study I Guided Solx tpx Econnect ACCOUNTING CHAPTERS 5&6 Question 2 (of 12) value: 10.00 points Exercise 5-8 Analyzing and recording merchandise transactions-both buyer and seller LO P1, P2 On May 11, Sydney Co. accepts delivery of $22,000 of merchandise it purchases for resale from Troy Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The goods cost Troy $14,740. When the goods are delivered, Sydney pays $540 to Express Shipping or delivery charges on the merchandse. On May 12, Sydney returns $2,160 of goods to Troy, who receives hem one day later and restores them to inventory. The returned goods had cost Troy $1,447. On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day. (Both Sydney and Troy use a perpetual inventory system.) 1. Propare journal entries that Sydney Co. records for these transactions viaw trensaction st view general journal General Journal Debit Credit 22,000 Merchandise inventory Accounts payable May 11 22,000 540 May 11 Merchandise inventory 540 Cash

Explanation / Answer

Journal Entries in the books of Sydney Co. Date Account Title Debit Credit May-11 Merchandise Inventory $22,000.00 Troy Corporation $22,000.00 (Goods purchased on Credit term of 3/10,n/90) May-11 Merchandise Inventory $540.00 Cash $540.00 (delivery charges paid) May-12 Troy Corporation $2,160.00 Merchandise Inventory $2,160.00 (Part of the goods returned) May-20 Troy Corporation $19,840.00 Discount Received $595.20 Cash $19,244.80 (Balance payment done and discount of 3% received)

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