How does each transaction effect on inventory inventory balance? ass #1 6SavedНеRequired information(The following information applies to the questions displayed below.]The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamatedis a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise fromAmalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems.Assume the following transactions between the two companies occurred in the order listed during the year endedDecember 31.a. Amalgamated sold merchandise to American Fashions at a selling price of $230,000. The merchandise had costAmalgamated $175,000.b. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 andcomplained to Amalgamated that some of the remaining merchandise differed from what American Fashions hadordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by AmericanFashions had cost Amalgamated $15,270.C. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed.skntencesRequired:1. Indicate the amount and direction of the effect (+ for increase, – for decrease, and NE for no effect) of each transaction on theInventory balance of American Fashions. (Enter all amounts as positive values.)Effect onTransactionInventory Balancea.b.C.< PrevNext >3of 315

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Accounting

How does each transaction effect on inventory inventory balance?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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