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 $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
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 $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please provide answer in text (Without image), every entry should have narration please
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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 $10 cash per unit (for a total cost of $20,000).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy
Company under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750).
Allied restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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; payment is net of
returns, allowances, and any cash discount.
Journal entry worksneet
1
2
3
Date
May 03
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).
Note: Enter debits before credits.
4 5
General Journal
Debit
Credit
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Transcribed Image Text:!
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 2,000 units at a
price of $10 cash per unit (for a total cost of $20,000).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy
Company under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750).
Allied restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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; payment is net of
returns, allowances, and any cash discount.
Journal entry worksneet
1
2
3
Date
May 03
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).
Note: Enter debits before credits.
4 5
General Journal
Debit
Credit
>
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