Answered

Prepare the journal entries to record the following transactions on Sheridan Company’s books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

(a) On March 2, Crane Company sold $890,100 of merchandise to Sheridan Company, terms 2/10, n/30. The cost of the merchandise sold was $528,500.
(b) On March 6, Sheridan Company returned $100,500 of the merchandise purchased on March 2. The cost of the merchandise returned was $68,700.
(c) On March 12, Crane Company received the balance due from Sheridan Company.
No Date Accounts titles and explanation Debit Credit
a) March 2
a) March 2
b) March 6
b) March 6
c) March 12
c) March 12
*Please also provide info on how the calculations were found.

Answer :

anthougo

Answer:

Sheridan Company

Journal Entries:

March 2:

a) Debit Inventory $890,100

Credit Accounts Payable (Crane Company)

To record the purchase of merchandise,  terms 2/10, n/30.

March 6:

b) Debit Accounts Payable (Crane Company) $100,500

Credit Inventory $100,500

To record the record of merchandise.

March 12:

c) Debit Accounts Payable (Crane Company) $789,600

Credit Cash Discount $15,792

Credit Cash Account $773,808

To record the payment to Crane on account.

Explanation:

The amount ($773,808) that Sheridan Company paid to Crane Company is $890,100 minus the inventory return of $100,500 ($789,600) and the cash discount of $15,792 ($789,600 * 2%).

Other Questions