Exercise 5-6: Analyzing and recording merchandise transactions—both buyer and seller L.O. P1, P2 On May 11, Sydney Co. accepts delivery of $32,500 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 $21,775. When the goods are delivered, Sydney pays $685 to Express Shipping for delivery charges on the merchandise. On May 12, Sydney returns $2,740 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,835. On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day. Both Sydney and Troy use a perpetual inventory system. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.). 1. Prepare journal entries that Sydney Co. records for these transactions. Date General Journal Debit Credit May 11 Merchandise Inventory (3%) 32,500 (3%) Accounts Payable (3%) 32,500 (3%) May 11 Merchandise Inventory (3%) 685 (3%) Cash (3%) 685 (3%) May 12 Accounts Payable (3%) 2740 (3%) Merchandise Inventory (3%) 2740 (3%) May 20 Accounts Payable (3%) 32500 (0%) Cash (3%) 29740 (0%) Merchandise Inventory (3%) 2740 (0%) ________________________________________ 2. Prepare journal entries that Troy Corporation records for these transactions. Date General Journal Debit Credit May 11 Accounts Receivable (3%) 32500 (3%) Sales (3%) 32500 (3%) May 11 Cost of Goods Sold (3%) 21775 (3%) Merchandise Inventory (3%) 21775 (3%) May 13 Sales Returns and Allowances (3%) 2740 (3%) Accounts Receivable (3%) 2740 (3%) May 13 Merchandise Inventory (3%) 1835 (3%) Cost of Goods Sold (3%) 1835 (3%) May 21 Cash (3%) 29740 (0%) Sales Discounts (3%) 2740 (0%) Accounts Receivable (3%) 32500 (0%)

Exercise 5-6: Analyzing and recording merchandise transactions—both buyer and seller L.O. P1, P2

On May 11, Sydney Co. accepts delivery of $32,500 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 $21,775. When the goods are delivered, Sydney pays $685 to Express Shipping for delivery charges on the merchandise. On May 12, Sydney returns $2,740 of goods to Troy, who receives them one day later and restores them to inventory. The returned goods had cost Troy $1,835. On May 20, Sydney mails a check to Troy Corporation for the amount owed. Troy receives it the following day. Both Sydney and Troy use a perpetual inventory system. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.).

1.	Prepare journal entries that Sydney Co. records for these transactions.

Date	General Journal	Debit	Credit
May 11	Merchandise Inventory (3%)	32,500 (3%)
	Accounts Payable (3%)		32,500 (3%)
May 11	Merchandise Inventory (3%)	685 (3%)
	Cash (3%)		685 (3%)
May 12	Accounts Payable (3%)	2740 (3%)
	Merchandise Inventory (3%)		2740 (3%)
May 20	Accounts Payable (3%)	32500   (0%)
	Cash (3%)		29740   (0%)
	Merchandise Inventory (3%)		2740   (0%)

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2.	Prepare journal entries that Troy Corporation records for these transactions.

Date	General Journal	Debit	Credit
May 11	Accounts Receivable (3%)	32500 (3%)
	Sales (3%)		32500 (3%)
May 11	Cost of Goods Sold (3%)	21775 (3%)
	Merchandise Inventory (3%)		21775 (3%)
May 13	Sales Returns and Allowances (3%)	2740 (3%)
	Accounts Receivable (3%)		2740 (3%)
May 13	Merchandise Inventory (3%)	1835 (3%)
	Cost of Goods Sold (3%)		1835 (3%)
May 21	Cash (3%)	29740   (0%)
	Sales Discounts (3%)	2740   (0%)
	Accounts Receivable (3%)		32500   (0%)