Question

Apr. 5
Sheridan Company purchased merchandise from DeVito Company for $12,100, terms 2/10, n/30, FOB shipping point. DeVito had paid $8,800 for the merchandise.6
The correct company paid freight costs of $330.
8
Sheridan Company returned damaged merchandise to DeVito Company and was given a purchase allowance of $1,800. DeVito determined the merchandise could not be repaired and sent it to the recyclers. The merchandise had cost DeVito $1,309.
May 4
Sheridan paid the amount due to DeVito Company in full.

Prepare the journal entries to record these transactions on the books of Sheridan Company.

Answer 1

Solution:

S.No	Particulars	Debit	Credit
05-Apr	Inventory Dr	$12,100
	To Accounts Payable		$12,100
05-Apr	Inventory Dr	$330
	To cash		$330
08-Apr	Accounts Payable Dr	$1,800
	To Inventory		$1,800
04-May	Accounts Payable Dr (12100-1800)	$10,300
	To Cash		$10,300