Question

This information relates to Splish Brothers Co.

1.		On April 5, purchased merchandise from Sunland Company for $28,200, terms 4/10, n/30.
2.		On April 6, paid freight costs of $710 on merchandise purchased from Sunland.
3.		On April 7, purchased equipment on account for $32,100.
4.		On April 8, returned $4,800 of April 5 merchandise to Sunland Company.
5.		On April 15, paid the amount due to Sunland Company in full.

(a)

Prepare the journal entries to record the transactions listed above on Splish Brothers Co.’s books. Splish Brothers Co. uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(b)

Assume that Splish Brothers Co. paid the balance due to Sunland Company on May 4 instead of April 15. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Journal entry

Date	General Journal	Debit	Credit
Apr 5	Merchandise inventory	28200
	Account payable		28200
Apr 6	Merchandise inventory	710
	Cash		710
Apr 7	Equipment	32100
	Account payable		32100
Apr 8	Account payable	4800
	Merchandise inventory		4800
Apr 15	Account payable (28200-4800)	23400
	Cash (23400*96%)		22464
	Merchandise inventory		936

b) Journal entry

May 4	Account payable (28200-4800)	23400
	Cash		23400