Analyzing and recording merchandise transactions-both buyer and seller L.O. P1, P2 On May 11, Smythe Co. accepts delivery of $35,000 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 $23,450. When the goods are delivered, Smythe pays $450 to Express Shipping for delivery charges on the merchandise. On May 12, Smythe returns $1,800 of goods to Hope, who receives them one day later and restores them to inventory. The returned goods had cost Hope $1,206. On May 20, Smythe mails a check to Hope Corporation for the amount owed. Hope receives it the following day.
1. Prepare journal entries that Smythe Co. records for these transactions. (Round your answers to the nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.) Date General Journal Debit Credit May 11 Purchased merchandise on credit. Paid shipping charges on purchased merchandise. May 12 Returned unacceptable merchandise. May 20 Paid balance within the discount period. 2. Prepare journal entries that Hope Corporation records for these transactions. (Round your answers to the nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.) Date General Journal Debit Credit May 11 Sold merchandise on account. To record cost of sale. May 13 Accepted a return from a customer. Returned goods to inventory. May 21 Collected account receivable