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 $8 cash per unit (for a total cost of $16,000). 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit terms" 2/10, n/60. The goods cost Allied $8,000. 7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,200). Allied restores the units, which cost $800, 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 $400 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. repare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross ethod.
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 $8 cash per unit (for a total cost of $16,000). 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit terms" 2/10, n/60. The goods cost Allied $8,000. 7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,200). Allied restores the units, which cost $800, 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 $400 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. repare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross ethod.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare journal entries
![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.
3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $8
cash per unit (for a total cost of $16,000).
5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit
terms’ 2/10, n/60. The goods cost Allied $8,000.
7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,200). Allied restores
the units, which cost $800, 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 $400 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
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Facad9037-64ff-4634-8cfc-408fed18564b%2F6d30e967-b35b-4e81-89f0-f35a55f0e274%2F530hlt_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $8
cash per unit (for a total cost of $16,000).
5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit
terms’ 2/10, n/60. The goods cost Allied $8,000.
7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,200). Allied restores
the units, which cost $800, 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 $400 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
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
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