Tt.16. 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 3,000 units at a price of $11 cash perunit (for a total cost of $33,000).May 5Allied sold 1,500 of the units in inventory for $15 per unit (invoice total: $22,500) to Macy Company under credit terms2/10, n/60. The goods cost Allied $16,500.May 7Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,250). Allied restores theunits, which cost $1,650, to its inventory.May 8Macy discovers that 150 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a pricereduction (allowance) and credits Macy's accounts receivable for $1,050 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, andany cash discount.Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify theaccounts and amounts (including + or -) for each transaction.Income Statement ComponentsSalesSales discountsSales returns and allowancesNet salesCost of goods soldGross profitMay 3Increase orDecreaseAmountMay 5Increase orDecreaseAmountMay 7Increase orDecreaseAmountMay 8Increase orDecreaseAmountMay 15Increase orDecreaseAmount Journal entry worksheet< 12Allied made its first and only purchase of inventory for the period on May 3 for3,000 units at a price of $11 cash per unit (for a total cost of $33,000).DateMay 03Note: Enter debits before credits.Record entry3 4 5< 1Journal entry worksheet1 2 3 42General JournalNote: Enter debits before credits.DateMay 08Record entryClear entry5Macy 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'saccounts receivable for $1,050 to compensate for the damage.General JournalDebitClear entryCreditDebitView general journalCreditView general journal>Journal entry worksheet1 2<Allied sold 1,500 of the units in inventory for $15 per unit (invoice total:$22,500) to Macy Company under credit terms 2/10, n/60. The goods cost$16,500 to Allied.Note: Enter debits before credits.DateMay 05Record entry3 4 5Journal entry worksheet< 1 2 3 4 5Note: Enter debits before credits.DateMay 15General JournalRecord entryClear entryAllied receives payment from Macy for the amount owed on the May 5purchase; payment is net of returns, allowances, and any cash discount.General JournalDebitClear entryCreditDebitView general journalCreditView general journal>Journal entry worksheet< 1 21 2 3Macy returns 150 units because they did not fit the customer's needs (invoiceamount: $2,250). Allied restores the units, which cost $1,650, to its inventory.Note: Enter debits before credits.DateMay 074 5Record entryGeneral JournalClear entryDebitCreditView genera

A journal entry is often used to record a business deal in an income statement. A journal entry is…

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 3,000 units at a price of $11 cash per unit (for a total cost of $33,000). May 5 Allied sold 1,500 of the units in inventory for $15 per unit (invoice total: $22,500) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $16,500. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,250). Allied restores the units, which cost $1,650, 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 $1,050 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. se the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the ccounts and amounts (including + or -) for each transaction. Income Statement Components Sales Sales discounts Sales returns and allowances Net sales Cost of goods sold Gross profit May 3 Increase or Decrease Amount May 5 Increase or Decrease Amount May 7 Increase or Decrease Amount May 8 Increase or Decrease Amount May 15 Increase or Decrease Amount

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1MP