Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. May Book Hint 3 Milied made its first and only purchase of Inventory for the period on May 3 for 3,000 units at a price of $11 cash per unit (for a total cost of $33,000). 5 Allied sold 1,500 of the units in inventory for $15 per unit (invoice total: $22,500) to Macy Co. under credit terma 2/10, n/60. The goods dont Allied $16,500. 7 Macy returns 150 units because they did not fit the customer's neede (invoice amount: $2,250). Allied restores the units, which cost $1,650, to its inventory. 8 Macy discovers that 150 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 $1,050 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. Seferences Exercise 4-5 Recording purchases, purchases returns, and purchases allowances LO P1 the ar proprie jour entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross od and a perpeto invenary system: It purchases Inese units for resale. (If no entry is required for a transaction/event, select ournal entry record the first account field.) < Prey of 12 Next > MacBook Pro

Answer 1

Journal entry are provided below for Macy co
Date	General Journal	Debit	Credit
3-May	No journal entry
5-May	Merchandise inventory	$22,500
	Accounts payable		$22,500
	(To record inventory purchased)
7-May	Accounts payable	$2,250
	Merchandise inventory		$2,250
	(To record merchandise inventory returned)
8-May	Accounts payable	$1,050
	Merchandise inventory		$1,050
	(To record purchase allowance received)
15-May	Accounts payable (22500-2250-1050)	$19,200
	Merchandise inventory (19200*2%)		$384
	Cash (19200-384)		$18,816
	(To record cash paid to supplier)