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Problem
On June 10, Diaz Company purchased $9,000 of merchandise from Taylor Company, FOB shipping point, terms 1/10, n/30. Diaz pays the freight costs of $550 on June 11. Damaged goods totaling $370 are returned to Taylor for credit on June 12. The fair value of these goods is $80. On June 19, Diaz pays Taylor Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Prepare separate entries for each transaction on the books of Diaz Company.
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He justifies the treatment by arguing that he is not an employee
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