Question

This information relates to Sherper Co.

1.		On April 5 purchased merchandise from Newport Company for $22,000, terms 2/10, n/30.
2.		On April 6 paid freight costs of $900 on merchandise purchased from Newport.
3		On April 7 purchased equipment on account for $26,000.
4.		On April 8 returned some of April 5 merchandise to Newport Company which cost $3,600.
5.		On April 15 paid the amount due to Newport Company in full.

Prepare the journal entries to record the transactions listed above on the books of Sherper Co. Sherper Co. uses a perpetual inventory system.

Assume that Sherper Co. paid the balance due to Newport Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Answer 1

Journal entry :

Date	accounts & explanation	debit	credit
Apr 5	Merchandise inventory	22000
	Account payable		22000
	(To record purchase)
Apr 6	Merchandise inventory	900
	Cash		900
	(To record freight paid)
Apr 7	Equipment	26000
	Account payable		26000
	(To record purchase equipment)
Apr 8	Account payable	3600
	Merchandise inventory		3600
	(TO record purchase return0
Apr 15	Account payable (22000-3600)	18400
	Cash (18400*98%)		18032
	Merchandise inventory (18400*2%)		368
	(To record amount paid)

Assume that Sherper Co. paid the balance due to Newport Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

date	accounts & explanation	debit	credit
May 4	Account payable (22000-3600)	18400
	cash		18400
	(To record amount paid)