Question

Presented below is information related to Sunland Industries. 1. On April 5, purchased merchandise on account from Sarasota Ltd. for £20,500, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of £960 on merchandise purchased from Sarasota. 3. On April 7. purchased equipment on account from Reed Manufacturing for £36,100. 4. On April 8, returned merchandise, which cost £3,000, to Sarasota. 5. On April 15, paid the amount due to Sarasota in full. - Your answer is partially correct. Prepare the journal entries to record these transactions on the books of Sunland Industries using a periodic inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Debit Credit Date April 5 20500 Account Titles and Explanation Inventory Accounts Payable Inventory 20500 April 6 Cash Equipment April 7 9 36100 Accounts Payable 36100 36100 36100 April 8 ) Accounts Payable Inventory April 15 ) Accounts Payable Inventory - 15600 Your answer is incorrect. Assume that Sunland Co.paid the balance due to Sarasota Company on May 4 instead of April 15. Prepare the journal entry to record this payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Date May 4

Answer 1

Date	Account Titles and Explanation	Debit	Credit
April 5	Purchase	$20,500
	Accounts payable		$20,500
April 6	Freight in	$960
	Cash		$960
April 7	Equipment	$36,100
	Accounts payable		$36,100
April 8	Accounts payable	$3,000
	Purchase return and allowances		$3,000
April 15	Accounts payable	$17,500
	Cash		$17,150
	Purchase discount		$350

Final amount due = Cost of goods purchased - Cost of goods returned
= 20,500 – 3,000
= $17,500
Discount amount = Final amount due x Discount percentage
= 17,500 x 2/100
= $350
Cash payment to be made = Final amount due - Discount amount
= 17,500 - 350
= $17,150

Date	Account Titles and Explanation	Debit	Credit
May 4	Accounts payable	$17,500
	Cash		$17,500

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