Question

In: Accounting

Exercise 5-1 This information relates to Crane Co.. 1. On April 5, purchased merchandise from Sheridan...

Exercise 5-1 

This information relates to Crane Co..

 1. On April 5, purchased merchandise from Sheridan Company for $26,000, terms 3/10, n/30.

 2. On April 6, paid freight costs of $520 on merchandise purchased from Sheridan Company.

 3. On April 7, purchased equipment on account for $31,400.

 4. On April 8, returned $4,100 of April 5 merchandise to Sheridan Company.

 5. On April 15, paid the amount due to Sheridan Company in full.


 (a) Prepare the journal entries to record the transactions listed above on Crane Co.'s books. Crane Co. uses a perpetual inventory system. 

 (b) Assume that Crane Co. paid the balance due to Sheridan Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Exercise 5-1 This information relates to Crane Co.. 1. On April 5, purchased merchandise from Sheridan Company for $26,000, t


Solutions

Expert Solution

Debit Credit
April 5 Inventory 26000
     Accounts payable 26000
April 6 Inventory 520
      Cash 520
April 7 Equipment 31400
     Accounts payable 31400
April 8 Accounts Payable 4100
      Inventory 4100
April 15 Accounts Payable 21900
      Inventory 657 =21900*3%
      Cash 21243
b
May 4 Accounts Payable 21900
      Cash 21900

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