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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 1,000 of the units in inventory for $14 per unit (invoice total: $14,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $10,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400). Allied restores the units, which cost $1,000, 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 $600 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. May Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Credit Date General Journal Debit Cash May 15 Sales discounts Accounts receivable

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 1,000 of the units in inventory for $14 per unit (invoice total: $14,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $10,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400). Allied restores the units, which cost $1,000, 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 $600 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. May Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Credit Date General Journal Debit Cash May 15 Sales discounts Accounts receivable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 1,000 of the units in inventory for $14 per unit (invoice total: $14,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $10,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400). Allied restores the units, which cost $1,000, 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 $600 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. May
Transcribed Image Text: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 1,000 of the units in inventory for $14 per unit (invoice total: $14,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $10,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400). Allied restores the units, which cost $1,000, 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 $600 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. May
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Credit Date General Journal Debit Cash May 15 Sales discounts Accounts receivable
Transcribed Image Text:Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Credit Date General Journal Debit Cash May 15 Sales discounts Accounts receivable
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