Question

Allied Merchandisers was organized on May 1 Macy Co. is a major customer (buyer) of Allied (seller) products. May Allied sade its first and only purchase of Inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000). s Allied sold 1,000 of the units in Inventory for $15 per unit (invoice total $15,000) to Macy Co. under credit terms 2/10, 1/60. The goods cost Allied $11,000 7 Macy returns 100 units because they did not fit the customer's needs (involce amount: $1,500). Allied restores the units, which cost $1,100, to its inventory 8 Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy's accounts receivable for $700 to compensate for the damage. 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method View transaction ist Journal entry worksheet Allied made its first and only purchase of inventory for the period on May 3 for 2.000 units at a price of $11 cash per unit (for a total cost of $22,000) Nobel tror debts before credits General Journal Debit Credit Clear entry View 12 of 5 Next >

Answer 1

Credit Date May 03 Debit 22,000 $ 22,000 May 05 15,000 $ 15,000 $ 11,000 11,000 May 07 1,500 General Journal Merchandise Inventory Cash Accounts Receivable Sales Cost of Goods Sold Merchandise Inventory Sales Returns and Allowances Accounts Receivable Merchandise Inventory Cost of Goods Sold Sales Returns and Allowances Accounts Receivable Cash Sales Discounts ($12,800 * 2%) Accounts Receivable $ 1,500 1,100 1,100 May 08 700 $ 700 May 15 12,544 256 $ 12,800