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 2,000 units at a price of $7 cash per unit (for a total cost of $14,000). May 5 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $7,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100). Allied restores the units, which cost $700, to its inventory. May 8 Macy discovers that 100 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. Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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 2,000 units at a price of $7 cash per unit (for a total cost of $14,000). May 5 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $7,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100). Allied restores the units, which cost $700, to its inventory. May 8 Macy discovers that 100 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. Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
8
![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 2,000 units at a
cash per unit (for a total cost of $14,000).
May 5
price of $7
Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $7,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100). Allied
restores the units, which cost $700, to its inventory.
May 8
Macy discovers that 100 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.
Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the
gross method and a perpetual inventory system; it purchases these units for resale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
1
2
3
Date
May 03
Allied made its first and only purchase of inventory for the period on May 3 for
2,000 units at a price of $7 cash per unit (for a total cost of $14,000).
Note: Enter debits before credits.
4 5
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd6926e7a-77ba-4f3e-aacc-3978a78fd8ab%2F0714f053-227c-4e31-a9f3-9ec932825c6e%2Fxnz96y4_processed.png&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 2,000 units at a
cash per unit (for a total cost of $14,000).
May 5
price of $7
Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $7,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100). Allied
restores the units, which cost $700, to its inventory.
May 8
Macy discovers that 100 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.
Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the
gross method and a perpetual inventory system; it purchases these units for resale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
1
2
3
Date
May 03
Allied made its first and only purchase of inventory for the period on May 3 for
2,000 units at a price of $7 cash per unit (for a total cost of $14,000).
Note: Enter debits before credits.
4 5
General Journal
Debit
Credit
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