Question

 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 $9 cash per unit (for a total cost of $18,000).

 5 Allied sold 1,00e of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $9,000.

 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,300). Allied restores the units, which cost $900, 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 receivabnse for $500 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.

Answer 1

Journal entry:

Date	General Ledger	Debit	Credit
May'5	Cash	11,200
	Sales Discount	500
	Accounts Receivable		11,700

Workings:

Description	Amount
Gross Sales	$          13,000
Less: Sales returns	$             1,300
Net sales / Accounts receivable	$          11,700
Less: Sales Discounts	$                500
Net account receivable	$          11,200