No Prepare Journal entries to record the following transactions for Allied assuming It uses a perpetual Inventory system and the gross method. 1 2 3 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. 4 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; payment is net of returns, allowances, and any cash discount. Date May 03 May 05 May 05 May 07 Merchandise inventory Cash Accounts receivable Sales Cost of goods sold Merchandise inventory x Answer is not complete. General Journal Sales returns and allowances Accounts receivable 33 >> >> >> Debit 10,000✔ 7,000✔ 5.000✔ 700✔ Credit 10,000✔ 7,000✔ 5,000✔ 700✔
No Prepare Journal entries to record the following transactions for Allied assuming It uses a perpetual Inventory system and the gross method. 1 2 3 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. 4 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; payment is net of returns, allowances, and any cash discount. Date May 03 May 05 May 05 May 07 Merchandise inventory Cash Accounts receivable Sales Cost of goods sold Merchandise inventory x Answer is not complete. General Journal Sales returns and allowances Accounts receivable 33 >> >> >> Debit 10,000✔ 7,000✔ 5.000✔ 700✔ Credit 10,000✔ 7,000✔ 5,000✔ 700✔
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Prepare Journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
No
1
2
3
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; payment is net of returns,
allowances, and any cash discount.
4
Date
May 03
May 05
May 05
May 07
Merchandise inventory
Cash
Accounts receivable
Sales
Cost of goods sold
Merchandise inventory
X Answer is not complete.
General Journal
Sales returns and allowances
Accounts receivable
✓
33
››
30
Debit
10,000 →
7,000✔✓
5,000
700✔
Credit
10,000 ✓
7,000✔
5,000
700✔
7402
-](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F934f47dc-fbed-471a-afb0-57b8b00080e8%2Fac72bb2d-98fa-4142-b92f-4e804d45c458%2Fa6nny9o_processed.png&w=3840&q=75)
Transcribed Image Text:Prepare Journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
No
1
2
3
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; payment is net of returns,
allowances, and any cash discount.
4
Date
May 03
May 05
May 05
May 07
Merchandise inventory
Cash
Accounts receivable
Sales
Cost of goods sold
Merchandise inventory
X Answer is not complete.
General Journal
Sales returns and allowances
Accounts receivable
✓
33
››
30
Debit
10,000 →
7,000✔✓
5,000
700✔
Credit
10,000 ✓
7,000✔
5,000
700✔
7402
-
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