Exercise 5-1 This information relates to Sheridan Co.. 1. 2. 3. 4. 5. On April 5

Question

Exercise 5-1 This information relates to Sheridan Co.. 1. 2. 3. 4. 5. On April 5, purchased merchandise from Crane Company for $27,200, terms 3/10, n/30. On April 6, paid freight costs of $780 on merchandise purchased from Crane Company. On April 7, purchased equipment on account for $34,20o. On April 8, returned $4,600 of April 5 merchandise to Crane Company. On April 15, paid the amount due to Crane Company in full. Prepare the journal entries to record the transactions listed above on Sheridan Co.'s books. Sheridan Co. uses a perpetual inventory system. ( "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered Record journal entries in the order presented in the problem.) No. Date Account Titles and Explanation Debit Credit 1. 2. 3.

Explanation / Answer

Journal entry :

Journal entry :

Date accounts & explanation debit credit Apr 5 Merchandise inventory 27200     Account payable 27200 (To record merchandise purchase) Apr 6 Merchandise inventory 780     Cash 780 (To record freight paid) Apr 7 Equipment 34200     Account payable 34200 (To record equipment purchased) Apr 8 Account payable 4600      Merchandise inventory 4600 (To record purchase return) Apr 15 Account payable (27200-4600) 22600      Cash 21922      Merchandise inventory 678 (To record amount paid)

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