Question

fundamental accounting principle John wild 24e

BookBub Shoulder (AC Join... CliffsNotes Study... $3.2 KobaneHTHO... Inside Kingsborou... Mail pret, Karina! Waen, 5 ASSIGNMENT Saved Help Save & Exit Required information [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 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 units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000. 7 Macy returns 125 units because they did not fit the customer's needs (1nvoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory 8 Macy discovers that 200 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 $300 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. I Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, sel "No journal entry required in the first account field.) View transaction list Journal entry worksheet 2 of 5 - Next >

Answer 1

Solution:

Journal Entries - Macy Co
Date	Particulars	Debit	Credit
3-May	No Journal Entry Required
5-May	Inventory Dr	$21,000.00
	To Accounts payable		$21,000.00
	(To record purchase of inventory on account)
7-May	Accounts payable Dr	$1,750.00
	To Inventory		$1,750.00
	(To record purchase returns)
8-May	Accounts payable Dr	$300.00
	To Inventory		$300.00
	(Being allowance received for damaged goods)
15-May	Accounts payable Dr	$18,950.00
	To Cash		$18,571.00
	To Inventory		$379.00
	(To record payment to supplier)