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 $9 cash per unit (for a total cost of $18,000). 5 Allied sold 1,000 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 receivable 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
View transaction list
Journal entry worksheet
1
3
4 5 6 7
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).
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
May 03
Transcribed Image Text:Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. View transaction list Journal entry worksheet 1 3 4 5 6 7 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). Note: Enter debits before credits. Date General Journal Debit Credit May 03
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 $9 cash per unit (for a total cost of $18,000).
5 Allied sold 1,000 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 receivable for $500 to compensate for
the damage.
15 Allied receives payment from Macy for the amount owed
returns, allowances, and any cash discount.
May
on the May 5 purchase; payment is net of
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 $9 cash per unit (for a total cost of $18,000). 5 Allied sold 1,000 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 receivable for $500 to compensate for the damage. 15 Allied receives payment from Macy for the amount owed returns, allowances, and any cash discount. May on the May 5 purchase; payment is net of
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