This Information Relates to Sherper Co

question 201

Essay

This information relates to Sherper Co.
1. On April 5 purchased merchandise from Newport Company for $22,000, terms 2/10, n/10.
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 $2,000.
5. On April 15 paid the amount due to Newport Company in full.
Instructions
(a) Prepare the journal entries to record the transactions listed above on the books of Sherper Co. Sherper Co. uses a perpetual inventory system.
(b) 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.

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Definitions:

General Journal

The primary accounting record used for recording all day-to-day financial transactions of a company.

General Ledger

The master set of accounts that summarize all transactions occurring within an entity, serving as the main source for financial reporting.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, according to the rules of double-entry accounting.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.