Question

On June 10, Sheridan Company purchased $7,700 of merchandise from Crane Company, terms 3/10, n/30. Sheridan Company pays the freight costs of $430 on June 11. Goods totaling $800 are returned to Crane Company for credit on June 12. On June 19, Sheridan Company pays Crane Company in full, less the purchase discount. Both companies use a perpetual inventory system.Prepare separate entries for each transaction on the books of Sheridan Company.

Answer 1

Answer:

Sheridan Company journal entries:

June 10

• Dr Merchandise inventory 7,700  
• Cr Accounts payable 7,700

June 11  

• Dr Merchandise inventory 430
• Cr Cash 430

June 12  

• Dr Accounts payable 800
• Cr Merchandise inventory 800

June 19

• Dr Accounts payable 6,900
• Cr Cash 6,693
• Cr Merchandise inventory 207