Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products.May 3Allied 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 5Allied 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 7Macy 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 8Macy 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 15Allied 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 Worksheet***Tab 1 of 5*---**Transaction Description:**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).---**Note:** Enter debits before credits.---**Journal Entry Table:**- **Date:** May 03- **General Journal:** - *(Fields for debit and credit entry)*---This worksheet is designed for recording journal entries. It provides a structured format for documenting the purchase of inventory, emphasizing the importance of entering debits before credits.

The journal entries are the first step of accounting to record the transactions as and when they are…

Answered: Allied Merchandisers was organized on…

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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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 purchase; payment is net of returns, allowances, and any cash discount.

**Journal Entry Worksheet**

*Tab 1 of 5*

---

**Transaction Description:**

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).

---

**Note:** Enter debits before credits.

---

**Journal Entry Table:**

- **Date:** May 03
- **General Journal:**
- *(Fields for debit and credit entry)*

---

This worksheet is designed for recording journal entries. It provides a structured format for documenting the purchase of inventory, emphasizing the importance of entering debits before credits.

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