Sheridan Company completed the following merchandising transactions in the month
of May. At the beginning of May, the ledger of Sheridan Company showed Cash of $4,500 and Common Stock of $4,500.
May 1Purchased merchandise on account from Gray's Wholesale Supply $3,800, terms 2/10, n/30.2Sold merchandise on account $1,800, terms 1/10, n/30. The cost of the merchandise sold was $1,200.5Received credit from Gray's Wholesale Supply for merchandise returned $250.9Received collections in full, less discounts, from customers billed on sales of $1,800 on May 2.10Paid Gray's Wholesale Supply in full, less discount.11Purchased supplies for cash $350.12Purchased merchandise for cash $1,500.15Received refund for poor quality merchandise from supplier on cash purchase $150.17Purchased merchandise from Amland Distributors $1,400, FOB shipping point, terms 2/10, n/30.19Paid freight on May 17 purchase $100.24Sold merchandise for cash $3,400. The merchandise sold had a cost of $2,200.25Purchased merchandise on account from Horvath, Inc. $750, FOB destination, terms 2/10, n/30.27Paid Amland Distributors in full, less discount.29Made refunds to cash customers for defective merchandise $80. The returned merchandise had a fair value of $20.31Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $500.
Sheridan Company 's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.
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