(a) Seller sold merchandise on account to the buyer, $4,750, terms 2/10, net 30, FOB shipping point on December 21. The cost of the merchandise is $2,850. The seller prepays the freight of $75. (b) Buyer returns $700 of merchandise as defective on December 28. The cost of the merchandise is $420. (c) Buyer pays within the discount period on December 31.   Required:   Journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(a) Seller sold merchandise on account to the buyer, $4,750, terms 2/10, net 30, FOB shipping point on December 21. The cost of the merchandise is $2,850. The seller prepays the freight of $75.
(b) Buyer returns $700 of merchandise as defective on December 28. The cost of the merchandise is $420.
(c) Buyer pays within the discount period on December 31.
 
Required:
  Journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.
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Journal entries are to be recorded for sale and purchase of inventory on the basis of perpetual inventory system. 

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