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On June 10, Pina Colada Corp. purchased $8,800 of merchandise on account from Flint Company, FOB shipping point, terms 2/10, n/30. Pina Colada Corp. pays the freight costs of $420 on June 11. Goods totaling $600 are returned to Flint for credit on June 12. On June 19, Pina Colada Corp. pays Flint Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Problem 1: Prepare separate entries for each transaction for Flint Company. The merchandise purchased by Pina Colada Corp. on June 10 cost Flint $5,500, and the goods returned cost Flint $266.
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