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Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $38,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $25,460. Sydney pays $530 cash to Express Shipping for delivery charges on the merchandise. May 12 Sydney returns $2,100 of the $38,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,407. May 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.

User Alessio
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Answer:

Sydney Retailing purchased $38,000 worth of merchandise from Troy Wholesalers. They paid $530 in cash for delivery charges. Sydney later returned $2,100 worth of goods to Troy. On May 20, Sydney paid the amount owed to Troy in cash.

Explanation:

May 11: Sydney accepts delivery of $38,000 of merchandise from Troy. The invoice is dated May 11, and the terms are 3/10, n/90, FOB shipping point. This means that Sydney has a discount of 3% if payment is made within 10 days. The ownership of the goods transfers to Sydney once they leave the shipping point (FOB shipping point).

Sydney pays $530 in cash to Express Shipping for the delivery charges on the merchandise. This payment is unrelated to Troy and is made directly to the shipping company.

May 12: Sydney returns $2,100 worth of goods to Troy. Troy receives the returned goods on the same day and restores them to its inventory. These returned goods had cost Troy $1,407.

May 20: Sydney pays the amount owed to Troy in cash. Troy receives the cash immediately.

Based on the information provided, we can summarize the transactions as follows:

Sydney purchased $38,000 worth of merchandise from Troy.

Sydney paid $530 in cash to Express Shipping for delivery charges.

Sydney returned $2,100 worth of goods to Troy.

Sydney owed an amount to Troy, which was paid in cash on May 20.

Please note that the discount for early payment (3/10) is not mentioned in the information provided, so it is assumed that Sydney did not take advantage of the discount.

User Maestromani
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