Question

Return to question Required information (The following information applies to the questions displayed below.) points Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2.000 units at a price of $10 cash per unit for a total cost of $20,000) 5 Allied sold 1.500 of the unita in inventory for $14 per unit invoice total: $21.000) te Haey Co. under credit terms 2/10, 1/60. The goods cost Allied $15,000. 7 Hacy returns 125 nits because they did not fit the customer's needs invoice amount $1,750). Allied restore the units, which cost $1,250, to its inventory. Maey discovers that 200 unite are seuffed but are still of use and therefore, keeps the unite. Allied sends Nacy acredi memorandum for $300 toward the original invoice anunt to compensate for the damage. 15 Allied receives payment from Macy for the amount owed on the May 5 puehase payment is net of returns, allowances, and any can discount. Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. (Allied estimates returns using an adjusting entry at each year-end) Answer is not complete. Date General Journal Debit Credit May 03 Marchandise inventory 20.000 20,000

Answer 1

Date		Account titles and explanation		Debit(in $)	Credit(in $)
	May-03	Merchandise Inventory		20,000
		Cash			20,000
	May-05	Accounts Receivable		21,000
		Sales			21,000
		Cost of goods sold		15,000
		Merchandise Inventory			15,000
	May-07	Sales Returns and allowance		1,750
		Accounts Receivable			1,750
		Merchandise Inventory		1,250
		Cost of goods sold			1,250
	May-08	Sales Returns and allowance		300
		Accounts Receivable			300
	May-15	Cash		18,571
		Sales Discounts		379
		Accounts Receivable			18,950