Merchandise with a list price of $4200 and costing $2300 is sold on account, subject to the following terms: FOD destination, 2/10, N/30. The seller pays the freight costs of $85 (debit Delivery Expense). Prior to payment for goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned. The correct amount received within the discount period.
Record the foregoing transactions, in good form, of the seller in the sequence indicated below.
a. Sold the merchandise, recognizing the sales and cost of merchandise sold.
b. Paid the freight charges.
c. Issued the credit memo.
d. Received payment from the customer.