Reference no: EM132680375
Problem - Sales-related and purchase-related transactions for seller and buyer
The following selected transactions were completed during May between Sky Company and Big Co.:
May 1. Sky Company sold merchandise on account to Big Co., $72,000, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold was $43,200.
2. Sky Company paid freight of $3,000 for delivery of merchandise sold to Big Co. on May 1.
May 5. Sky Company sold merchandise on account to Big Co., $48,500, terms FOB shipping point, n/eom. The cost of the merchandise sold was $30,000.
May 6. Big Co. returned $12,000 of merchandise purchased on account on May 1 from Sky Company. The cost of the merchandise returned was $7,200.
May 9. Big Co. paid freight of $1,800 on May 5 purchase from Sky Company.
May 15. Sky Company sold merchandise on account to Big Co., $64,000, terms FOB shipping point, 1/10, n/30. Sky Company paid freight of $2,500, which was added to the invoice. The cost of the merchandise sold was $38,400.
May 16. Big Co. paid Sky Company for purchase of May 1, less discount and less return of May 6.
May 25. Big Co. paid Sky Company on account for purchase of May 15, less discount.
May 31. Big Co. paid Sky Company on account for purchase of May 5.
Instructions - Journalize the May transactions for (1) Sky Company and (2) Big Co.