Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $7 cash 3 per unit (for a total cost of $7,000). May 5 Allied sold 500 of the units in inventory for $11 per unit (invoice total: $5,500) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $3,500. May Macy returns 50 units because they did not fit the customer's needs (invoice amount: $550). Allied restores the 7 units, which cost $350, to its inventory. May Macy discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price 8 reduction (allowance) and credits Macy's accounts receivable for $150 to compensate for the damage. May Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, 15 allowances, and any cash discount.

Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $7 cash 3 per unit (for a total cost of $7,000). May 5 Allied sold 500 of the units in inventory for $11 per unit (invoice total: $5,500) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $3,500. May Macy returns 50 units because they did not fit the customer's needs (invoice amount: $550). Allied restores the 7 units, which cost $350, to its inventory. May Macy discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price 8 reduction (allowance) and credits Macy's accounts receivable for $150 to compensate for the damage. May Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, 15 allowances, and any cash discount.

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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[The following information applies to the questions displayed below.] 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 3,000 units at a price of $7 cash per unit (for a total cost of $21,000). May 5 Allied sold 1,500 of the units in inventory for $11 per unit (invoice total: $16,500) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $10,500. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $1,650). Allied restores the units, which cost $1,050, to its inventory. May 8 Macy discovers that 150 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 $450 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is…
2 k t nces Required information [The following information applies to the questions displayed below.] 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 1,000 units at a price of $8 cash per unit (for a total cost of $8,000). May 5 Allied sold 500 of the units in inventory for $12 per unit (invoice total: $6,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $4,000. May 7 Macy returns 50 units because they did not fit the customer's needs (invoice amount: $600). Allied restores the units, which cost $400, to its inventory. May 8 Macy discovers that 50 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 $200 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5…
John's Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May: 1. John's purchased merchandise on account for $5,500. Freight charges of $550 were paid in cash. 2. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $850 and John's account was credited by the supplier. 3. Merchandise costing $3,050 was sold for $5,700 in cash. Required: Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet 1 2 3 4 5 Record the merchandise purchased on account for $5,500. Note: Enter debits before credits. Transaction General Journal Debit Credit 1a Record entry Clear entry View general journal 1b Record the payment of freight charges for $55o. 2. Record the return of merchandise purchased on account costing $850. 3a. Record the sale of merchandise for…
Required information [The following information applies to the questions displayed below.] 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 1,000 units at a price of $10 cash per unit (for a total cost of $10,000). May 5 Allied sold 500 of the units in inventory for $14 per unit (invoice total: $7,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $5,000. May 7 Macy returns 50 units because they did not fit the customer's needs (invoice amount: $700). Allied restores the units, which cost $500, to its inventory. May 8 Macy discovers that 50 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 $300 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase;…
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On March 1, Crunk Company sold merchandise in the amount of $5.800 to Wells Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Crunk uses the perpetual inventory system and the gross method. On July 5, Wells returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Crunk must make on July 5 is: 500 Accounts receivable Sales returns and allowances Sales returns and allowances Accounts receivable Accounts receivable Sales returns and allowances: Cost of goods sold Merchandise inventory Sales returns and allowances Accounts receivable Sales returns and allowances Accounts receivable Merchandise inventory Cost of goods sold 350 & B see 350 500 500 350 500 350 500 350 See 500 350
Journal Entries 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 3,000 units at a price of $8 cash per unit (for a total cost of $24,000). May 5 Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $12,000. May 7 Macy returns 150 units because they did not fit the customer’s needs (invoice amount: $1,800). Allied restores the units, which cost $1,200, to its inventory. May 8 Macy discovers that 150 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. 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…
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Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $7 cash per unit (for a total cost of $7,000). Allied sold 500 of the units in inventory for $11 per unit (invoice total: $5,500) to Macy Co. under credit terms 2/10, n/60. Record the cost of goods sold. Macy returns 50 units because they did not fit the customer’s needs (invoice amount: $550). Allied restores the units, which cost $350, to its inventory. Macy discovers that 50 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 $150 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.