Answer:
Explanation:
The journal entries are shown below:
On the books of Tuzun Company:
On June 10
Merchandise Inventory A/c $8,000
To Accounts payable A/c $8,000
(Being inventory purchased on credit)
On June 11
Merchandise inventory A/c Dr $400
To Cash A/c $400
(Being freight is paid by cash)
On June 12
Account payable A/c Dr $300
To Merchandise inventory A/c $300
(Being returned inventory is recorded)
On June 19
Accounts payable A/c Dr $7,700 ($8,000 - $300)
To Cash A/c $7,546
To Merchandise Inventory A/c $154 ($8,000 - $300) × 2%
(Being due amount is paid and the remaining balance is credited to the cash account)
On the books of Epps Company:
On June 10
Accounts receivable A/c Dr $8,000
To Service revenue A/c $8,000
(Being service provided is recorded)
Cost of goods sold A/c Dr $4,800
To Merchandise inventory A/c $4,800
(Being inventory sold at cost)
On June 12
Accounts receivable A/c Dr $300
To Service revenue A/c $300
(Being returned inventory is recorded)
Cost of goods sold A/c Dr $70
To Merchandise inventory A/c $70
(Being fair value is recorded)
On June 19
Cash A/c Dr $7,546
Sales discount A/c Dr $156
To Accounts receivable A/c $7,700
(Being payment is received)
