Textbook Problem

Use the following information for Cornerstone Exercises 6-20 and 6-21:

Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:

a. On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225.

b. On April 1, Mathis paid freight charges of S250 cash to have the goods delivered to its warehouse.

c. On April 8, Mathis returned $800 of the merchandise which had originally cost Reece $500.

d. On April 10, Mathis paid Reece the balance due.

Recording Sales Transactions

Refer to the information for Mathis and Reece companies on the previous page.

Required:

Prepare the journal entries to record these transactions on Reece’s books. Assume that Reece uses the net method to record sales on account and no sales returns are expected.