Please help me to solve this problem Allied Merchandisers was organized on May 1. Macy Company 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 $12cash per unit (for a total cost of $24,000).May 5Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,000) to Macy Company undercredit terms 2/10, n/60. The goods cost Allied $12,000.May 7Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,600). Allied restoresthe units, which cost $1,200, to its inventory.May 8Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives alprice reduction (allowance) and credits Macy's accounts receivable for $800 to compensate for the damage.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 1521Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify theaccounts and amounts (including + or -) for each transaction.May 3May 5Income Statement ComponentsIncrease orDecreaseMay 7Increase orDecreaseIncrease orDecreaseAmountAmountAmountSalesSales discountsSales returns and allowancesNet salesCost of goods soldGross profitcesMay 8Increase orDecreaseAmountMay 15Increase orDecreaseAmount

The net sales is calculated after adjusting for sales discounts , sales returns and allowance from…

Allied Merchandisers was organized on May 1. Macy Company 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 $12 cash per unit (for a total cost of $24,000) May 5 Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $12,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,600). Allied restores the units, which cost $1,200, to its inventory. May 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 $800 to compensate for the damage. May 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. Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the accounts and amounts (including + or -) for each transaction. May 3 May 7 Income Statement Components Increase or Decrease May 5 Increase or Decrease Amount Amount Increase or Decrease Amount Sales Sales discounts Sales returns and allowances Net sales Cost of goods sold Gross profit May 8 Increase or Decrease Amount May 15 Increase or Decrease Amoun

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4CP: Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and...