On May 11, Smythe Co. accepts delivery of $30,000 of merchandise it
purchases for resale from Hope Corporation. With the merchandise is an
invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The
goods cost Hope $20,000. When the goods are delivered, Smythe pays $335
to Express Shipping for delivery charges on the merchandise. On May 12,
Smythe returns $1,200 of goods to Hope, who receives them one day later
and restores them to inventory. The returned goods had cost Hope $800.
On May 20, Smythe mails a check to Hope Corporation for the amount owed.
Hope receives it the following day.
Required:
1 Prepare journal entries to record each of the
merchandising transactions assuming that the periodic inventory system
is used by both the buyer and the seller.
