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

Question

Recording sales, purchases, shipping, and returns-buyer and seller LO P1, P2

May	11	Sydney accepts delivery of $26,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $17,420. Sydney pays $520 cash to Express Shipping for delivery charges on the merchandise.
	12	Sydney returns $1,300 of the $26,000 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.

Complete this question by entering your answers in the tabs below.

[su_box title="♦ Relevant knowledge" box_color="#2d6ff7" radius="1"]Every single transaction during the course of a company is recorded in a specific journal. The journal is also referred to as the source of the initial entry. The entries within the journals are appropriately titled journal entries.

The importance to Journal Entries: Journal entries contain at minimum two accounts, which means that at least two accounts experience changes of balances. If balances of accounts change, so too do the overall financials of the company.

Once every transaction has been recorded in the journal, the entries are then recorded in the case of transferring to the general ledger. The general ledger contains the list of all transactions in the company which are recorded by the particular account. The general ledger can also be called the book of final entries.

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Callum Jones · Accepted Answer

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 <a href="//drive.google.com/uc?id=1DhTyvDAv-dlx2e7bWMhNm-w-KBTmvYNR&export=download/Sydney-Retailing-(buyer)-and-Troy-Wholesalers-(seller)-enter-into-the-following-transactions.-  -May-11-Sydney.png?x-oss-process=image/resize,w_560/format,webp" target="_blank" rel="nofollow ugc noopener"><img alt="Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.    May 11 Sydney..." src="https://drive.google.com/uc?id=1DhTyvDAv-dlx2e7bWMhNm-w-KBTmvYNR&export=download/Sydney-Retailing-(buyer)-and-Troy-Wholesalers-(seller)-enter-into-the-following-transactions.-  -May-11-Sydney.png?x-oss-process=image/resize,w_560/format,webp"></a><a href="//drive.google.com/uc?id=1sd75vxDJY2qskDUGiCuxSBBkpJCAfM8W&export=download/Sydney-Retailing-(buyer)-and-Troy-Wholesalers-(seller)-enter-into-the-following-transactions.-  -May-11-Sydney.png?x-oss-process=image/resize,w_560/format,webp" target="_blank" rel="nofollow ugc noopener"><img alt="Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.    May 11 Sydney..." src="https://drive.google.com/uc?id=1sd75vxDJY2qskDUGiCuxSBBkpJCAfM8W&export=download/Sydney-Retailing-(buyer)-and-Troy-Wholesalers-(seller)-enter-into-the-following-transactions.-  -May-11-Sydney.png?x-oss-process=image/resize,w_560/format,webp"></a>
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 Sydney Retailing (buyer). No: Credit Date General Journal Debt $ 26,000 1. May 1 Merchandise inventory Accounts payable (to track purchases merchandis $ 26,000. 2 May 11 and 520 520 $ Merchandise inventory Cash (to track cash paid for delivery cost) $ 1,300 May 12 Accounts payable Merchandise inventory. (To record returns of good) & 1,300 May 20 Accounts payable $ 24,700 Inventory Merchandise inventory $ 741 Cash $ 23,959 Calculation: May 20, All ornts payable and 26,000 $ 1,300 $ 24,700 Early Payment Discount = ($ 26,000-$1,300) X31. $ 24700 X 30% $74)
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 Credit Troy Wholesalers (selles). No Date General Journal 1. May! Accounts receivable Sales (To record allounts receivable) Debit $ 26,000 $ 26,000 2 may !! $ 17,420 Cost to goods sold. Merchandise inventory (To track cost of goods sold). $ 17,420 and 1.300 May 12 sales retvans, allowance Allounts receivables (to record sales fallowance) $1.300 $871 May 12 Merchandise inventory Cost to sell goods (to nelord return goods cost) $871 24,700 5. maya lash and 23,959 sales discounts $ 941 Accounts receivables (to record sale discount) Calculation: Accounts receivables $ 26,000 $ 1,300 $ 24,700 Sales discounts - ($ 26,000 $11,300) X 3. $ 24,700 X 3.3% $ 941
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Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.