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  3. on may 11, sydney co. accepts delivery of $40,000

On May 11, Sydney Co. accepts delivery of $40,000 of merchandise it purchases for resale...

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Accounting

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On May 11, Sydney Co. accepts delivery of $40,000 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 $30,000. When the goods are delivered, Sydney pays $345 to Express Shipping for delivery charges on the merchandise. On May 12, Sydney returns $1,400 of goods to Troy, who re- ceives them one day later and restores them to inventory. The returned goods had cost Troy $800. 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. Prepare journal entries that Sydney Co. records for these transactions, 2. Prepare journal entries that Troy Corporation records for these transactions. Exercise 5-8 Analyzing and recording merchandise transactions-both buyer and seller P1 P2 Check (1) May 20, CA Cash $37,442

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