Question

Sheridan Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described belaw 1, Truck #1 has a list price of $40,350 and is acquired for a cash payment of $37,391 2. Truck #2 has a list price of $43,040 and is acquired for a down payment of $5,380 cash and a zero interest-bearing note with a face a ount of $37 66 The note is due April 1 2018. Sheridan would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. 3. Truck N3 has a list price of $43,040 It is acquired in exchange for a computer system that Sheridan carries in inventory. The computer system cost牛32,280 and is normally sold by Sheridan for $40,888. Sheridan uses a perpetual i entory system. 4, Truck #4 has a list price of $37,660. It is acquired in exchange for 900 shares of common stock in Sheridan Corporation. The stock has a par value per share of S 10 and a market price of $13 per share. Prepare the appropriate journal entries for the above transactions for Sheridan Corporation. (Round present value factors to S decimal places, e.g. 0.52587 and final answers to 0 decimal places, e.g. 5,27S. Credit account titles ard automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit 2. 3. 4.

Answer 1

		Sheridan Corporation
		Journal Entries
	Truck	General,Journal	Debit	Credit
	Truck#1	Truck #1	$ 37,391.00
		To Cash		$ 37,391.00
		(Being amount of Truck #1 purchased by paying cash)
	Truck#2	Truck #2(As per below working)	$ 39,930.00
		Discount on note payable=($5380+$37660-$39930)	$   3,110.00
		To Cash		$   5,380.00
		To Note Payable		$ 37,660.00
	Truck #3	Truck#3	$ 40,888.00
		Cost of goods sold	$ 32,880.00
		To Inventory		$ 32,880.00
		To Sales Revenue		$ 40,888.00
		(Being amount of Truck#3 purchase in exchange of computer system)
	Truck#4	Truck(900 shares @$13)	$ 11,700.00
		To Common Stock(900 shares @10 par value)		$   9,000.00
		To Paid in capital excess of par		$   2,700.00
		(Being amount of Truck #4 purchased by issuing common stock at $10 par value at $13)
		Truck #2(Working)
		P.V of 9% for 1 year==(1/(1+.09)^1	0.91743
		P.V of $37660=($37660*.91743)	34550
		Truck Price=($34550+$5380)	39930