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
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
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1MP
Related questions
Question
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 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.
Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the
accounts 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b0aaa1d-1b6b-4e3e-88ff-1742e6c9fb7c%2F02cb84e5-2833-4593-bf42-225e96bff49e%2F24d5a9n_processed.jpeg&w=3840&q=75)
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 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.
Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the
accounts 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
![Journal entry worksheet
< 1
2
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).
Date
May 03
Note: Enter debits before credits.
Record entry
3 4 5
< 1
Journal entry worksheet
1 2 3 4
2
General Journal
Note: Enter debits before credits.
Date
May 08
Record entry
Clear entry
5
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.
General Journal
Debit
Clear entry
Credit
Debit
View general journal
Credit
View general journal
>
Journal entry worksheet
1 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.
Date
May 05
Record entry
3 4 5
Journal entry worksheet
< 1 2 3 4 5
Note: Enter debits before credits.
Date
May 15
General Journal
Record entry
Clear entry
Allied receives payment from Macy for the amount owed on the May 5
purchase; payment is net of returns, allowances, and any cash discount.
General Journal
Debit
Clear entry
Credit
Debit
View general journal
Credit
View general journal
>
Journal entry worksheet
< 1 2
1 2 3
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.
Note: Enter debits before credits.
Date
May 07
4 5
Record entry
General Journal
Clear entry
Debit
Credit
View genera](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b0aaa1d-1b6b-4e3e-88ff-1742e6c9fb7c%2F02cb84e5-2833-4593-bf42-225e96bff49e%2Fin7dm8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Journal entry worksheet
< 1
2
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).
Date
May 03
Note: Enter debits before credits.
Record entry
3 4 5
< 1
Journal entry worksheet
1 2 3 4
2
General Journal
Note: Enter debits before credits.
Date
May 08
Record entry
Clear entry
5
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.
General Journal
Debit
Clear entry
Credit
Debit
View general journal
Credit
View general journal
>
Journal entry worksheet
1 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.
Date
May 05
Record entry
3 4 5
Journal entry worksheet
< 1 2 3 4 5
Note: Enter debits before credits.
Date
May 15
General Journal
Record entry
Clear entry
Allied receives payment from Macy for the amount owed on the May 5
purchase; payment is net of returns, allowances, and any cash discount.
General Journal
Debit
Clear entry
Credit
Debit
View general journal
Credit
View general journal
>
Journal entry worksheet
< 1 2
1 2 3
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.
Note: Enter debits before credits.
Date
May 07
4 5
Record entry
General Journal
Clear entry
Debit
Credit
View genera
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