Question

On December 1, 2022, Sheridan Company had the account balances shown below. Debits Credits Cash $1,390 Accounts Receivable 2,720 Inventory (3,300 x $0.60) $4,760 Accumulated Depreciation-Equipment 4,090 Accounts Payable 1,980 Common Stock 22,700 Retained Earnings $33,530 10,200 Equipment 19,220 $33,530 The following transactions occurred during December Dec. 3 Purchased 4,300 units of inventory on account at a cost of $0.77 per unit. 5 Sold 4,700 units of inventory on account for $0.90 per unit. (It sold 3,300 of the $0.60 units and 1,400 of the $0.77.) 7 Granted the December 5 customer $270 credit for 300 units of inventory returned costing $240. These units were returned to inventory 17 Purchased 2,100 units of inventory for cash at $0.90 each. 22 Sold 2,000 units of inventory on account for $1.03 per unit. (It sold 2.000 of the $0.77 units.) Adjustment data: 1. Accrued salaries and wages payable $480. 2. Depreciation on equipment $220 per month. 3. Income tax expense was $190, to be paid next year.

Answer 1

solution:- Journal Entries Date Account Titles and Explanation Debites) eredit(s) Dec 3 Inventory (4;300 linits X $0.17) . $3311 Accounts payable . $3,311 (to record purchases made on account) Accounts Receivable (u 100x$0.90) $4,230 , $4,230 .: sales revenue Lo record sold inventory on account) Decg cost of goods soll $3,058 $3,058 Invertory : (to record. Cost of goods sold). Deco ACCOU

sales returns & allowance Accounts Receivable. to record saies returns) $270 Decy Inventory - cost of goods sold (to record return of goods) $240 Dec 17 $1,890 DEC 22 $2,060 $2,060 Inventory (211004 $0.90) : Accounts payable : (to record purchases made for cash) Accounts Receivablel2,000x51.03) : sales revenue .. (to record sales made on account) cost of goods sold Inventory (2.000 + $8.50 (torecord cost of goods sold) Dec zz $1,510

Debit (s) Credit(s) $480 $480 . Adjusting Entries Event. Account Tizles 8 Edc planations - 1 salaries and wages Expense - salaries and wages payable (to record accrued salaries and wages payable Depreciation Expense. AGeamulated Depreciation to record depreciation on equipment) $220 $220 $190 3 $190 Income Tax Expense . . Income Taxe payable (to record Income tax to be paid . next year

Explanations ID Dec 5 -> cost of good sold = [(3,3004$0.60) +(1400*80.113 .:. .= $1,980 + $1,078 : - $3,058 2) Dec 17-> I Iristead of Accounts Receivable account we can also credit cash account.

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